Probate & Trust Administration
For parents of a child with special needs, estate planning means thinking about their child’s long-term future.
With an adequate estate plan, parents can provide for their child to receive quality care and financial security when they are no longer present.
To arrange a consultation about your particular situation, simply call King Law Offices, LLC, in Madison at 608-620-7285.
1. Quality Care
Once parents are no longer available to provide for the care of a special-needs child, questions arise: Who will care for the child? Who will meet their emotional and spiritual needs and ensure their quality of life?
These questions should be discussed in advance with those family members who will presumably be able to watch over the child’s welfare when the parents no longer can. It is best to prepare a written memorandum discussing the particular requirements of a child with special needs, such as social, medical, spiritual and work needs, and strategies to deal with day-to-day issues.
As part of their estate planning, parents must appoint a guardian of the person for a child with special needs. They should discuss the responsibilities of the personal guardian with the person they appoint. Usually, the guardian is a family member.
2. Financial Security
Equally important is providing for the financial security of a child with special needs once both parents are no longer available. The parents must designate someone to be in charge of the child’s financial affairs.
It is also of paramount importance that parents transfer their assets at death in a manner that will not disqualify their child for government benefits to which they are entitled. As of 2008, if an individual has assets of more than $2,000, they are disqualified from receiving Supplemental Security Income. Likewise, if a child receives income that is over the specified limits, their SSI benefits also may be lost. As health care costs continue to rise, it is frequently critical that the child’s income does not exceed the limits and cause the child to lose Medicaid (health insurance benefits). Medicaid is critical for a child once the parents are gone and the child is not covered under the parents’ health insurance.
3. The Special-Needs Trust
The best method of providing for the financial future of a child with special needs is to set up a special-needs trust. Such a trust typically receives a share of the parents’ estate, while the other children also receive shares. Assets transferred to a special-needs trust are not considered to be the property of the child and therefore do not affect the child’s eligibility for benefits.
A special-needs trust is much superior to the traditional method of disinheriting a special-needs child and transferring the assets directly to a family member for the child’s benefit. The traditional method is not prudent because that family member may die, become disabled, become subject to a judgment or go through divorce, which may lead to the loss of the assets that were intended to pay for the special needs of the child.
A special-needs trust is also superior to a third method, which is to transfer the assets to a guardian of the estate of the child. This does not work very well because assets transferred to a guardian of the estate are still considered to be owned by the child and therefore disqualify the child from receiving government benefits.
Estate Planning Is Essential, So Contact Us Today
If you have a child with special needs, you need to do estate planning to see that the child has quality, loving caregivers and financial security. To do this, you need to designate a future personal guardian for the child and to communicate with this guardian and other family members about the child’s needs. You should also establish a special-needs trust to hold that child’s share of your estate so as not to disqualify the child for government benefits, including Social Security and Medicare, to which that child is entitled.