Top 10 Estate Planning Tips for Parents of Children with Special Needs

Today, children with a wide variety of special needs live long and productive lives. Advancements in medical science and healthcare plus the availability of innovative resources that provide occupational training, employment and independent living assistance have helped make this possible.

The legal field has also refined estate planning tools to ensure that children with special needs have access to government benefits without foregoing family support. Planning for the future is key, and the earlier the better to avoid unintended missteps.

The following are important planning options to consider: 

1. Prepare Advance Directives: If your adult child has capacity, it is important that they execute both a Health Care Proxy and a Durable Power of Attorney... Read More?

2. Petition for Article 17A Guardianship: Parents of children with special needs must plan for the child’s care beyond the age of 18.  If parents wish to continue to make important decisions for their child after age 18, such as medical care, residential placement decisions and financial decisions, they must become the legal guardians of the child... Read More?

3. Establish a First Party Special Needs Trust: A First Party Special Needs Trust is funded with the assets of a special needs person under the age of 65. When properly drafted, the trust will not affect the special needs individual’s eligibility for government benefits but must include a payback provision... Read More?

4. Establish a Third Party Special Needs Trust: A Third Party Special Needs Trust allows family members to use their own assets to fund a trust for the benefit of an individual with special needs. This type of trust can be created during lifetime or under a will... Read More?

5. Establish a Pooled Trust: A Special Needs Pooled Trust is a community trust managed by a non-profit organization. The non-profit acts as the trustee and therefore can be a good option for small families or those seeking non-family member trustees... Read More?

6. Engage in Prudent Medicaid Planning: Your child may need to enroll in Medicaid to cover their medical costs. Any transfers made during the five year lookback period may result in a Medicaid penalty. However, transfers to a Special Needs Trust are one exception to this rule and generally incur no penalty whatsoever... Read More?

7. Consider Beneficiaries of Retirement Plans: If your child has special needs and inherits a lump sum or income stream from your retirement account, their government benefits such as Medicaid or SSI will be put in jeopardy... Read More?

8. Obtain Life Insurance Policies: Taking out a personal life insurance policy and leaving the payout to your child’s Third Party Special Needs Trust is a great way to leave your child with assets that will not affect their government benefits upon your passing... Read More? 

9. Leaving Property to a Third Party: Parents may think leaving property to a third party, such as another child, to be used for the care of their child with special needs is a good idea. This is NEVER a good option... Read More?

10. Create an ABLE Account: Achieving a Better Life Experience (ABLE) accounts are modeled on the popular 529 College Savings Plans... Read More?