Planning for children with disabilities

People with disabilities or handicaps face many obstacles in life, including costly heath care and limited ability to earn money. Parents with disabled children must carefully consider their estate plan to make sure the long-term needs of a disabled child are provided for. This type of planning is often referred to as “special needs” planning.

The goals of special needs planning are different from conventional estate planning. Many children with disabilities benefit from government benefit programs such as SSI and Medicaid. These government programs require the disabled person to have limited income and assets in order to be eligible. While living, the parents can assist with the needs of their disabled children without a loss of benefits. However, at the death of the parent, specialized planning is required to make sure the disabled child does not lose their benefits based on an inheritance. In order to preserve the government benefits that are so desperately needed for a person with long term disabilities, the parent can structure the inheritance in the form of a Trust, known as a “Special Needs Trust” or SNT. A SNT provides for the disabled child’s needs over and above what is provided by the government benefit programs. There are limits on what the funds from a SNT can be used for; however, they can provide for the disabled child’s long term benefit and allow the health costs to be paid by the government programs in place. The SNT also names a Trustee and Guardian for the disabled child so that the proper persons are in place to look after the well-being of the disabled child. A SNT can revert back to other family members at the death of the disabled child.

In addition to planning for the inheritance of a disabled child, there are other legal issues a parent must consider once the “child” has attained adulthood. If the child has mental deficiencies then the parents may need to file to become the legal Guardian of the child at age 18.

In order to learn more about the benefits of structuring your estate to protect the needs of your family, please consult with an experienced estate planning attorney. The peace of mind that comes from a well thought out estate plan is worth its weight in gold!