• Facebook
  • Twitter
  • Instagram
  • Youtube
Call Us: (626) 355-4000
Cali Law
  • Home
  • Get Started Here
    • Estate Planning Basics
    • Single Parents
    • Married with Children
    • Life Partners with Children
    • Those Without Children
  • Who We Are
    • About Marc G. Garlett
    • How We Are Different
    • Meet Our Team
    • Our Office
    • Client Testimonials
  • Our Services
    • Estate Planning
    • Trust Administration
    • Probate Administration
    • Legacy Preservation
    • Community Outreach
  • Common Questions
  • Blog
  • Contact Us
  • Menu

How to Protect an Inheritance for Your Special Needs Child

Education, Estate Planning, Estate Planning Blog, Family, Family Values, Kids Protection Planning, Parents, Special Needs Children, Trusts, Wills

If your child requires or is likely to require governmental assistance to meet their basic needs, do not leave money directly to your child. Instead, establish a Special Needs Trust.

A trust that is not designed with your child’s special needs in mind will probably render your child ineligible for essential benefits. A Special Needs Trust is designed to manage resources while maintaining the individual’s eligibility for government benefits. Planning is important because many beneficiaries as adults will rely on government benefits for support. If the disabled person has assets in their own name, they might lose eligibility.

Medicaid, and other public benefits programs, will not pay for everything your child might need. A Special Needs Trust can pay for medical and dental expenses, annual independent check-ups, necessary or desirable equipment (such as a specially equipped van), training and education, insurance, transportation, and special foods.

Unfortunately, some Special Needs Trusts are unnecessarily restrictive and generic. Many trusts are not customized to the particular child’s needs. Thus, the child fails to receive the support and benefits that the parent provided when they were alive. For example, children who are high functioning and active in their communities can benefit from a Special Needs Trust that is carefully tailored to provide adequate resources to support their social lives.

Does your child have significant medical concerns? Should the trust allow for birthday gifts for other family members? What about travel expenses to visit loved ones? Do you have a preferred living arrangement for your child? Your child’s special needs trust should address all these issues and more.

Another mistake attorneys with special knowledge in this area often see is a “pay-back” provision in the trust rather than allowing the remainder of the trust to go to others upon the death of the child with special needs. If a “pay-back” provision is included unnecessarily, Medicaid will receive the remainder (up to the amount of benefits provided) in the trust upon the death of the beneficiary. These “pay-back” provisions, however, are necessary in certain types of special needs trusts. An attorney who knows the difference can save your family a small fortune.

A Special Needs Trust will help you avoid one of the most common mistakes parents make. Although many people with disabilities rely on SSI, Medicaid, or other needs-based government benefits, you may have been advised to disinherit your child with disabilities—the child who needs your help the most—to protect that child’s public benefits. These benefits, however, rarely provide more than subsistence, and this “solution” does not allow you to help your child after you are incapacitated or gone.

Disinheriting your child with special needs might be a temporary solution if your other children are financially secure and have money to spare. But permanently disinheriting your child with special needs could be a huge mistake! It is not a solution that will protect your child after you and your spouse are gone. The money can be lost in a lawsuit, divorce, liability claim, or adverse judgment against your other children. For example, what if your child with the money divorces? His or her spouse may be entitled to half of it and will likely not care for your child with special needs. What if your child with the money dies or becomes incapacitated while your child with special needs is still living?

These are just some of the concerns parents of special needs children need to navigate. The bottom line is to get a special needs trust in place with the help of an advisor who understands the unique issues inherent with special needs situations.

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

January 31, 2020/by Marc Garlett
Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on Linkedin
  • Share by Mail
https://www.calilaw.com/wp-content/uploads/2020/01/special-needs-child-91024.jpg 520 780 Marc Garlett https://www.calilaw.com/wp-content/uploads/2020/02/Cali-Law-Logo-A5-1-300x99.png Marc Garlett2020-01-31 20:31:362020-01-31 20:32:46How to Protect an Inheritance for Your Special Needs Child

Blog Categories

  • Asset Protection
  • Beneficiaries
  • Blended Family
  • Business Succession Planning
  • Common Mistakes
  • Dementia
  • Digital Estate Planning
  • Divorce
  • Education
  • Elderly
  • End of Life
  • Estate Planning
  • Estate Planning Blog
  • Family
  • Family Values
  • Financial Caregivers
  • Gifting
  • Healthcare
  • Inheritance
  • Insurance
  • Kids Protection Planning
  • Legacy Planning
  • Long-term Care
  • Marc's Personal Blog
  • Medicare
  • Naming Legal Guardians
  • News
  • Parents
  • Personal
  • Pets
  • Power of Attorney
  • Probate
  • Real Estate
  • Retirement
  • Same Sex Couples
  • Special Needs Children
  • Spendthrift Trusts
  • Taxes
  • Trusts
  • Uncategorized
  • Wills
  • Wills vs. Trusts

Get In Touch

Phone

(626) 355-4000

Address

100 West Lemon Avenue, Suite 202
Monrovia, California 91016

Schedule a Complimentary Consultation

Simply Fill Out This Form

3 + 0 = ?

4 Things Trusts Can Do That Wills Can’t Kobe Bryant’s Untimely Death Highlights the Vital Need for Estate Planning...
Scroll to top