Special Needs Planning
If you have a child or a loved one who is disabled or otherwise not able to care for themselves, special planning must be done to ensure that they have competent, loving care and do not lose their government benefits.
Altman & Associates will help you create a special needs trust for your child or other family members. The trustee will be able to use the trust funds to supplement the government assistance they receive. This will allow them to benefit from various government programs, while the trust provides them with things the government does not.
Unfortunately, most parents fail to plan. Since there are strict asset ownership limits that must be adhered to, failure to plan may have the effect of disqualifying your child from government assistance. Sometimes parents leave their money to their other children, trusting that siblings will take care of the special needs child out of the funds they receive. However, all too often that never happens, or if it does, the child receives far less then they otherwise would. Let Altman & Associates Law Office work with you to create a plan that is right for you and your loved ones.
Special Needs Mistakes
Avoid making these eight mistakes in planning for your special needs child:
- Disinheriting the child
You may have been advised to disinherit you disabled child to protect the child's SSI, Medicaid or other government benefits. These benefits rarely provide more than subsistence, and this “answer” does not allow you to help your child after you are gone or should you become incapacitated. If your child requires, or is likely to require, governmental assistance to meet basic needs, consider establishing a Special Needs Trust. - Ignoring special needs when creating a trust for a child
A trust that is not designed with your child's special needs in mind will probably render your child ineligible for essential benefits. The Special Needs Trust is designed to provide for the disabled person's comfort and happiness without sacrificing eligibility. Issues addressed can include medical and dental expenses, annual independent check-ups, necessary or desirable equipment (such as specially equipped vans) training and education, insurance, transportation, and essential dietary needs. The disabled person can also receive spending money, electronic equipment and appliances, computers, vacations, movies, payments for a companion and other self-esteem and quality-of-life enhancing expenses if the trust is sufficiently funded. - Creating a generic Special Needs Trust
Special Needs Trusts created by attorneys who have limited knowledge of the area can be unnecessarily inflexible and not customized to the particular child's needs thus the child fails to receive the benefits that the parents provided when they were alive. Also, “pay back” provisions are necessary in certain types of Special Needs Trusts, but detrimental in others. An attorney who knows the difference can save your family hundreds of thousands of dollars, or more. - Procrastination
None of us knows when we will die or if we will become incapacitated, so it is important to plan for your special needs child (or adult) early. This is particularly important because, unlike most other beneficiaries, your special needs child may never be able to compensate for your failure to plan. A minor beneficiary without special needs can work to meet essential needs as he or she reaches adulthood. You special needs child may not be able to do so. - Not inviting contributions from others to contribute to the trust
If you create the trust now, your extended family and friends can make gifts to the trust or remember the trust as they plan their own estates. You can also consider whether making the trust the beneficiary of a life insurance policy makes sense now while you are healthy and insurance rates are reasonable. In addition you can leave your own assets to the trust in your will and name the trust as a beneficiary of life insurance or retirement benefits. - Choosing the wrong trustee
When you and your spouse are no longer able to serve as trustee, you can choose who will serve according to the instructions that you have provided. You can also choose a team of advisors or a professional trustee. Whomever you choose, make sure they are financially savvy, well organized, and, most important of all, ethical. -
Relying on your other children to use their money to help the special needs child
Relying on your other children to provide for your special needs child from their own inheritances can be a temporary solution for a brief time. If your other children have money to spare. However, this will not protect your child after you and your spouse have died or when siblings have their own expenses, financial priorities, or potential problems such as:
- If your child with the money gets divorced, his or her spouse may be entitled to half the money and is unlikely to use it to care for your special needs child.
- If your child with the money dies or becomes incapacitated while your special needs child is still living, his or her heirs might not care for your special needs child.
- If your child with the money loses a lawsuit or has other significant creditor problems, the court will require your child to turn that money over to the creditor.
- Not protecting the special needs child from predators
An inheritance funded by Will rather than Revocable Living Trust goes into the public record. Predators are particularly attracted to vulnerable beneficiaries, such as the young and those with limited self-protection capabilities. Trusts let you decide who has access to the information about a child's inheritance, thereby protecting your child and other family members who may be serving as trustees from predators.
Contact the special needs attorneys at Altman & Associates
Founding members of the Special Needs Academy |
