It always surprises me to hear parents who have a child with special needs tell me that they were not aware of what they needed to do to ensure the future well-being and care of their child is properly handled. Or sometimes, they tell me they didn’t know they needed to do anything at all.

If that’s you, and you have a child with special needs at home, this article is for you. And if you have friends or family who have a child with special needs, please share this article with them.

Every parent who has a child with special needs MUST understand what’s needed to provide for the emotional, physical, and financial needs of their child, if and when something happens to them.

Naming Guardians
Of course, the first and most critical step in ensuring the well-being and care of your child with special needs’ future is to name both short and long-term legal guardians to take custody of and care of your child, in the event of your death or incapacity. And as you well know, this responsibility doesn’t end at age 18, if your child will not grow into an adult who can independently care for him or herself.

While we understand this lifetime responsibility probably feels overwhelming, we’ve been told repeatedly by parents that naming legal guardians in writing and knowing their child will be cared for in the way they want, by the people they want, creates immense relief.

Beyond naming a guardian, you’ll also need to provide financial resources to allow your child to live out his or her life in the manner you desire. This is where things can get tricky for children with special needs. In fact, it may seem like a “Catch-22” situation. You want to leave your child enough money to afford the support they need to live a comfortable life. Yet, if you leave money directly to a person with special needs, you risk disqualifying him or her for government benefits.

Special Needs Trusts
Fortunately, the government allows assets to be held in what’s known as a “special needs trust” to provide supplemental financial resources for a physically, mentally, or developmentally disabled child without affecting his or her eligibility for public healthcare and income assistance benefits.

However, the rules for such trusts are complicated and can vary greatly between different states, so a comprehensive special needs trust needs to be properly structured and appropriate for your child’s specific situation.

There are two ways to set up a special needs trust. In certain situations, we build it into your revocable living trust, and it will arise, or spring up, upon your death. From there, assets that are held in your revocable living trust will be used to fund your child’s special needs trust.

In other cases, we can set up a special needs trust that acts as a vehicle for receiving and holding assets for your child now. This makes sense if you have parents or other relatives who want to give your child with special needs gifts sooner rather than later.

Once the trust is funded, it’s the trustee’s job to use its funds to support the beneficiary without jeopardizing eligibility for government benefits. To handle this properly, the trustee must have a thorough understanding of how eligibility for such benefits works and stay current with the law.  The trustee is also required to pay the beneficiary’s taxes, keep detailed records, invest trust property, and stay current with the beneficiary’s needs.

If you need help creating a special needs trust for your child, contact us. We can develop a sustainable living plan for your child with special needs that will provide her or him with the financial means they need to live a full life, while preserving their access to government benefits.

Dedicated to empowering your family, building your wealth and defining your legacy,

Marc Garlett 91024

Legacy Planning 91024Parents of children with special needs usually share one overriding concern: what will happen to my child after I’m gone? They also often struggle with guilt for what they envision as an eventual destiny for their other children who may assume care of their special needs sibling.

But I’m here to tell you, this is the kind of situation estate planning was made for. You can take action right now to ensure your special needs child has the proper care for the rest of his or her life. As you consult with your attorney to create a special needs trust or other estate planning tools, be sure to consider the following:

The amount of financial support your special needs child will require over his or her life. Start by calculating how much support you are providing now. Then think about the support they will need as they reach adulthood and project what that amount will be all the way into their senior years. Consider if he or she will be able to provide any of their own support, or will rely completely on government benefits. Of course, you also need to estimate how much you are able to contribute.

Governmental benefits protection. If your child already receives government benefits from Medicare or Supplemental Security Income (SSI), your plan will need to take this into consideration and not provide your child with too much income which would disqualify them from these benefits. Usually, a special needs trust will enable you to provide your child with additional income without losing governmental benefits.

How your other children fit into your estate plan. A vast majority of parents want to ensure equal treatment for all their children when it comes to an inheritance. But sometimes, with a special needs child, this is not possible – especially if parents have limited financial resources. If this will be true for your family, be sure you talk with your other children about your plan, and discuss how distribution of other assets might help to even things up for them.

Who will manage your special needs child’s finances. When you create a special needs trust, you will also need to name a trustee or trustees to manage the trust assets for the benefit of your child. Choose someone you know, who cares about your child, and who is willing to assume and carry out the responsibilities of caring for him or her.

On one hand, parents of special needs children are no different than any other parent. We all do whatever needs to be done to protect and provide for our children, no matter what. On the other hand, parents of special needs children often have to go far above and beyond what most other parents have to deal with. And the universal question of, “how do I want my child cared for after I’m gone?” becomes complicated and multi-dimensional. But with special care and planning, those parents can also ensure their child’s care will continue in alignment with their desires, hopes, and dreams for the future, no matter what.

To you family’s health, wealth, and happiness,
Signature - Marc