Elder Law Topic Tuesday: A SPECIAL CHILD NEEDS SPECIAL PLANNING, Part 1 of 2 by Esther Wang, Elder Law Attorney

The mere idea wrenches the heart of any parent: if untimely death or disability strikes, who will care for your children?

Because no one is immortal, most of us recognize the need for an estate plan, preferably one that appoints a suitable guardian for our children, sees to their financial needs, and avoids probate.

In the best of circumstances, it's a task requiring clear thinking and good legal advice. But when a child has special needs, the challenge intensifies. Before we explore estate planning strategies for parents of special needs children, let's look at why all parents need an estate plan.

A PAGE FROM OLIVER TWIST

"A ward of the court" may sound like something out of the nineteenth century. But that's precisely what becomes of children whose legally disabled or deceased parents have failed to plan for their care. Unless you've created an estate plan that spells out who should assume responsibility for your child, the courts will step in.

And that's true whether you've left behind an estate worth millions or nothing at all. When children take center stage in probate court, it's because the court wants to ensure that a responsible person is supervising their physical needs and financial affairs.

The court will appoint a guardian to assume responsibility for your child's personal care. To oversee your child's financial affairs, the court will appoint a financial guardian.

Often, the financial guardian is not one person, but an entity, such as a bank or a professional money management institution. Probate judges have tremendous discretion in whom they may appoint as guardians.

So, there's very little assurance that the judge's appointments will be the same individuals you would choose. In fact, if qualified family members aren't available or deemed suitable, the judge may very well appoint professional guardians who may be strangers to you and your child.

The guardian will be supervised by the probate court judge assigned to your child's case. The guardian is usually required to obtain judicial approval before undertaking any significant financial transactions on your child's behalf.

Busy schedules and heavy caseloads often mean that it can take weeks—or even months—before a financial transaction can be reviewed and approved by the supervising judge. That may create devastating delays in providing care and comfort for your child.

Because the court is involved in supervising their activities, guardians frequently hire attorneys to help them navigate through the legal system. The fees for these attorneys—as well as the fees charged by the guardian and the probate court itself—all come out of the estate you've left behind for your child's benefit.

These expenses leave less money to provide for your child's care, education, and other requirements.

UPPING THE ANTE: PLANNING FOR THE SPECIAL NEEDS CHILD

Clearly, every parent has a responsibility to plan for the unthinkable. But when the child has physical, emotional or mental challenges, careful estate planning is even more crucial for three important reasons.

First, is the simple fact that these children have greater needs. Depending on the degree of their disability, they may require specialized treatment that encompasses therapy, housing, education, adaptive equipment, and in-home care, among many other costly services.

The need for this care may extend throughout their childhood and last well into adulthood, or even their entire lives. Providing the appropriate degree of care requires careful financial planning.

Here's the second critical reason why parents of a special child need a special estate plan: it is the only way to ensure that you can provide for your child without jeopardizing the child's eligibility for government and private benefit programs.

Finally, for parents of children with special needs, estate planning is the only way to protect the child's financial interests today as well as in the future, when you may no longer be on the scene.

THE HORNS OF DILEMMA

It's a painful dilemma that parents of special children often face: to keep a disabled child eligible for important federal and state benefit programs, the child can have few assets. That leaves parents with a difficult choice: provide a legacy for their special child and hope it will be sufficient for all his needs, or make the child a virtual pauper and retain his or her eligibility for government assistance.

Fortunately, there is a simple answer within reach of nearly everyone: the Special Needs Trust.

We will conclude the 2nd part of this Special Needs Trust discussion later in the month of July! There is much to discuss and we hope to be able to engage further with you. Please feel free to message us or leave us a comment and we will follow up with you.

For more direct questions, please call our law firm at 909-888-7100.