For parents, preparing for a child’s future if something happens to them is a daunting task with many factors to consider, but it is a very necessary task to complete. Adding in the factor of a child being disabled or mentally incapacitated elevates the stress aspect and the necessity of parents to have their affairs in order before they die. Parents caring for a special needs child understand that their child may never be financially independent. In many instances, the child may require supervision and help to perform their daily basic needs way past their 18th birthday. No parent wants their special needs child to be taken advantage of or neglected, especially those that cannot speak up for themselves. Estate planning is a way to protect special needs individuals. It is a means of getting ahead and ensuring that the incapacitated child qualifies for governmental benefits, has resources to make sure basic needs are met, and any inherited assets are properly managed.
Things to Consider
some things to consider when estate planning with a child with disabilities include deciding where the child will live, what benefits will the child be receiving, who will be in the best position to care for the child or willing to care for the child, what is the child’s medical prognosis and life expectancy. Severity of the disability is another important consideration because the scope and cost of care is dependent on the child’s capacity. A child that has a mild mental disability and is mobile will have completely different needs than a totally incapacitated individual, or an individual who has capacity but has limited physical mobility.
Guardians
Should something happen to a parent, someone will have to be there to provide for the wellbeing of the child and manage their financial affairs. Each special needs child is different, and as parents of special needs children, they know their child’s likes and dislikes, their quirks, and their physical and mental limitations. However, a designated guardian may not know the first thing about caring for an incapacitated adult child. While it is common that an older sibling, or other family member may be designated as guardian of the child, the 24-hour duty of caring for a special needs child can require on the job experience. Parents should look not only at the potential guardian’s ability to care for their child, but also ensure the person chosen wants this responsibility. It is also possible to appoint one person as the guardian of the person of the child and another to manage the estate of the child. Most importantly, parents to discuss their child’s disabilities with the designated guardian to explain their child’s current and future needs.
Good Financial Planning
Some special needs individuals need help managing their money, and some may not be able to manage their money at all. One great solution is setting up a special needs trust. A special needs trust is one that enables a trustee to provide for the care and expenses of a special needs individual; it is a place to put their assets and have someone watch over and invest them in proper places.
Special needs individuals can qualify for Social Security Benefits and Medicaid to help them with their daily needs. However, the amount of government benefits can be decreased if the special needs individual is deemed to have too much money. If parents are leaving money directly to their child with special needs, that gift will likely keep that person from qualifying for certain government benefits. It is important to preserve the child’s public benefits so they will not deplete their personal funds. Selecting a trustee to manage the funds is equally as important as establishing a guardian for the child.
Many parents have purchased insurance policies for the benefit of their children. It is not a good idea to name the disabled child as the beneficiary of a policy, because the proceeds from the policy may affect their government benefits. A better idea is to name the special needs trust created for the child as the beneficiary of the policy.
Lastly, it is always good to have a backup plan, or multiple back up plans. These are onerous duties, so parents should make sure that the guardian they choose is someone they can trust and someone who wants the job. It is also a good idea to keep a portfolio of the child’s medical information, including list of doctors, medications, and diagnosis. Also, continuing education with health care, legal and financial professionals is very important to stay informed as to the best options to protect adults and children with disabilities.