Planning for a Disabled Child
Estate pre-planning should be an important part of everyone’s financial regimen, but this process becomes even more important when you have a child with disabilities.
A lot of factors go into creating a uniquely designed plan, depending on their unique personal challenges and whether they are a minor or adult. The goal is to help your special-needs child continue to lead an enriching, happy life even in your absence.
A LIFETIME OF CARE
The larger goal of special-needs planning is to preserve public aid while also supplementing your child’s care. There are additional benefits to taking care of this right away: If plans are put in place while you’re still alive, the estate avoids probate. Others interested parties, like their grandparents, can contribute to a trust. Named co-trustees can also get hands-on experience in helping with childcare and administering the guardianship. Depending on the child’s capability, this money-management program may be critically important since it will be the only future path to protecting eligibility for benefits. It will provide additional funds for a broader scope of care, and create a financial resource should benefits become restricted or end all together.
SPECIAL-NEEDS TRUST
Children are at particular risk if they are unable to live independently after the death of a parent of guardian. A special-needs trust can ensure that they are provided with needed resources and care over the course of their lifetime. Parents or guardians should name the trust as a beneficiary in their will, according to the American Bar Association, instead of the child. Many public-aid options are designed to be resource dependent, meaning recipients aren’t eligible if they have access to a certain amount of money. These trusts allow for an inheritance without endangering aid provided by Medicaid, SSI or other government programs because assets held in trust are not directly available to the child. Funds from life-insurance policies, IRAS and retirement plans can also be directed to the trust, and the child still has access to other programs.
DESIGNATING A CARETAKER
Beyond the obvious financial considerations, parents and guardians must select a designated caretaker to look after their special-needs child — or to manage their care, if the child is in an assisted-living environment. Work with an attorney who specializes in estate planning in order to create both a trust and this succession plan, since states have differing regulations and laws regarding who may serve as a legal guardian.