Estate Planning for Children with Special Needs
Jeffrey G. Marsocci
The Plain English Attorney ? Estate Planner ? Author ? Speaker
Special Needs Planning
When you have children with special needs who are classified as disabled or handicapped, especially if they can’t fully care for themselves even with government financial support, you may be in a position where you need to plan more for them, even if they are no longer minors. If this is true for you, there are some VERY important things you should know …
Direct Distributions
In some cases, direct distributions to your legally disabled children above a certain sum (the amount varies on a case-by-case basis) can be taken by the government or other agencies that provide for or care for your children. Or at the very least, they can have their current benefits cut off.
The logic is that the government or agency is “owed” this money because in many cases, they have been paying some money to support your child. While that might not seem completely fair to those of you who have disabled children, it is a reality, and it is something to consider when you are planning your estate.
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Bequeathing Money
What’s more, bequeathing money to a disabled child can, in some cases, make him or her ineligible for SSI and Medicaid. Usually, disabled people can only have a liquid net worth of a few thousand dollars to qualify for SSI. For people with disabilities, losing this monthly financial support can be a devastating blow. However, you can avoid this and still provide for your child with the right kind of estate planning.
Estate Planning Options
A number of estate planning options exist that can help you protect your assets and your children so they won’t be taken advantage of. In fact, there are two different situations when you might need a separate Special Needs Trust in addition to a Revocable Living Trust with the right protective language. But here’s the easy part: the necessary provisions in these trusts for most families are actually in our standard Revocable Living Trust.
By securing money in this trust or trust, you can create a situation where your trustee takes care of the fiscal necessities of the child. As long as money isn’t given directly to the child, there is typically no danger of losing government support or of the government swooping in and eating up substantial portions of the estate. It does mean that technically your child doesn’t own the money, but as long as you choose a trustee carefully this shouldn’t make much difference in the child’s life. In fact, it can actually further protect the estate.
If you have a disabled child, grandchild, or other beneficiary you wish to include in your estate plan, make sure to talk to an estate planning attorney about your options. There are trusts available that can protect your child, their benefits, and your estate. For more information, check out the free webinar available at https://www.SpecialNeedsPlanningWebinar.com. Or if you prefer to read a physical book, check out?my book?The Simple Guide to Special Needs Estate Planning.
All parents want to protect their children. When your child is disabled that becomes slightly more complicated, but it is certainly doable, and usually within the same context as your overall estate planning. Just plan carefully and work with a good estate planning attorney and you should be able to put plans in place that protect your child for many years to come.