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Special Needs Planning

Estate planning by parents who have children with disabilities involves many challenges, including the following:

  • How do you leave funds for the benefit of the child without causing the child to lose important public benefits?
  • How do you make sure that the funds are well managed?
  • How do you make sure that your other children are not over-burdened with caring for the disabled sibling, and that any burdens fall relatively evenly among the siblings?
  • What is fair in terms of distributing your estate between your disabled child and your other children?
  • How do you make sure there’s enough money to meet your disabled child’s needs?
Special Needs Planning

Special Needs Trusts

Often, parents of children with special needs try to resolve these issues by leaving their estates to their other children, leaving nothing to the disabled children. They have a number of reasons for this approach: The disabled child shouldn’t receive anything because she can’t manage money and would lose her benefits. She doesn’t need any inheritance because she will be taken care of by the public benefits she receives. The other children will take care of their sister.

This approach can be problematic.  First, public benefits programs are often inadequate. They need to be supplemented with other resources. Second, both public benefits programs and individual circumstances change over time. What’s working today, may not work tomorrow. Other resources need to be available, just in case. Third, relying on one’s other children to take care of their siblings places an undue burden on them and can strain relations between them. It makes it unclear whether inherited money belongs to the healthy child to spend as he pleases, or whether he must set it aside for his disabled sister. If one child sets money aside, and the other doesn’t, resentments can build that may split the family forever.

The better answer to many of these questions is a “Special Needs Trust.”   Such trusts fulfill two primary functions:  The first is to manage funds for someone who may not be able to do so himself or herself due to disability.  The second is to preserve the beneficiary’s eligibility for public benefits, whether that be Medicaid, Supplemental Security Income (SSI), public housing, or any other program. They come into play in a multitude of situations, including parents planning for a disabled child, a disabled individual coming into an inheritance or winning or settling a personal injury claim, or one spouse planning for a disabled spouse.

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Want to learn more?

To find out more about special needs planning in general and special needs trusts in particular, please contact me to schedule a free 30 minute consultation.