Parents and primary caregivers of children with special needs have a life-altering role. The safety, security, and long-term care or treatments required to provide their child with the best quality of life don’t end at the standard ages of 18, 21, or after college graduation. Many require some level of care and financial security for the rest of their life, requiring a special type of estate planning.
Estate Planning Tips For Caregivers of Special Needs Children
General estate plans look at two possibilities: the first is that you’ll live a long healthy life, and your estate will be divided as you see fit once you die. The second is that life is unpredictable, and should you die suddenly, become suddenly or chronically ill, or incapacitated, an estate plan has all of the safety nets required to take care of those who depend on you.
For parents or caregivers with special needs children, estate planning is essential to ensure your vulnerable loved one is taken care of no matter what the unpredictable future may hold.
Here are some of the critical things to consider as you work with an estate planning attorney.
Personalize the plan according to your child’s needs
Every situation is different. Your estate plan must be personalized to current and future care needs. In addition to ensuring the right guardianship, a durable power of attorney, living situation, and long-term financial planning, potential progressive conditions, and long-term care plans should be outlined for those who will execute your wishes on behalf of your child.
The three focuses of a personalized estate plan for your special needs children are:
- A money management strategy to support the child for their lifetime.
- Protecting your child’s eligibility for current and future public benefits (most public funding options available to special needs children and adults are determined by income, so the plan must accommodate for an income that ensures the child’s funding qualification).
- Creating a financial safety net in case public funds dry up or the parameters change, leaving your child without funds their care depends on.
- Categorizing and outlining details about every aspect of the child’s life, including personal preferences and needs, medical history and anticipated care needs, all relevant healthcare provider contacts, emergency contacts, legal and financial planning representatives, etc. Organize the estate plan in a way that is easy for others to decipher.
Your estate planning attorney will provide a checklist to help you prepare for each of your meetings. We recommend using an accordion folder or binder that provides separate sections that evolve as you work with your estate plan on customizing applicable categories.
While computer files are fantastic and maybe your starting point, we highly recommend creating a paper file of the final estate plan documents and sharing a copy with relevant parties. Also, make sure the attorney or trusted family member has access to specific passwords so they can access anything that remains in digital form. While there is no need to share your estate plans with all heirs and beneficiaries if you prefer not to, it is worth sharing them with those who are specifically connected to the future care of your child with special needs or disabilities.
Most Common Planning Options for Special Needs Children
There are several common planning options most parents or caregivers follow when creating their estate plan with regard to a loved one with disabilities:
- Disinherit them. Yes, this is an option and one that is sometimes selected to ensure the child always qualifies for public funding and income-dependent support resources. As you can imagine, while this option may provide more financial stability for families who have a very small or limited estate, it puts your loved one at significant risk. If you plan to disinherit your child, you must have a solid line-up of highly trusted individuals to take over trustee, guardianship, and power of attorney roles.
- Leave the estate to siblings. If you have multiple children, you can leave the special needs child out of the will and trust altogether. By not inheriting, you protect income-dependent financial benefits while ensuring their sibling(s) have enough to take care of the special needs child’s interests. Again, caution is advised. Your other children or step-children’s financial/personal lives can turn on a dime, leaving your child with special needs at risk.
- Leave an inheritance to the disabled child. If your estate is large enough, a child is less likely to need public funding resources. This creates more spacious options where your living or special needs trust can be created to encompass a financial plan that provides for their entire future without the need for social security or Medical/Medicaid benefits. Special needs trusts are the ideal option for children who are unable to manage their own funds or make their own decisions, protecting them from draining their own trust or from the predatory intentions of others.
Special considerations when selecting a trustee
In most cases, people automatically select trustees that are trusted family members, such as a sibling, child, or very close family friends. However, your child’s vulnerabilities and the unpredictable nature inherent in a special needs trust are worth considering. As we mentioned above, family members’ lives can be turned upside down in a heartbeat. If they are your special needs child’s guardian or trustee, your child is automatically at risk.
Instead, most estate attorneys recommend selecting a more stable, trusted, and independent party to serve as the trustee. This may include:
- Your estate attorney.
- A non-profit organization that specializes in special needs and offers these types of services.
- A co-trustee situation where a trusted family member or sibling works in tandem with a professional trustee to create a solid balance of personalization and professional trust management.
Begin Planning Your Special Needs Trust with Tseng Law Firm
Are you ready to begin creating or revamping estate plans for your special needs child? Then, schedule a consultation with us at Tseng Law Firm. (510) 835-3090. We are dedicated to educating and counseling you on your planning options that address all your unique needs and concerns. Our goal is to provide you with peace of mind that you, your loved ones, and your assets are protected during your lifetime and afterward.