You have unique estate planning needs as a parent with a child with special needs. Providing for your child if you become incapacitated or after you pass away is a serious responsibility that requires thoughtful consideration and personalized advice from an experienced Dallas estate planning attorney.
Many parents are familiar with a Special Needs Trust (SNT), which can benefit their special needs child after they pass away, but may not realize that there are essential protections that their child may need in the event the parents are alive, otherwise incapacitated and unable to provide for or care for their child. Part of comprehensive estate planning for parents of a child with special needs includes these considerations.
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Understanding Special Needs Status
The special needs umbrella covers children with a wide range of intellectual and physical impairments. Some children can live fairly independently, have a job, and continue their education beyond high school, while others require around-the-clock caregiver services.
Your estate plan should consider who will provide caregiver services if you provide some or all of this for your child. Consider whether you would like your child to move to an assisted living community or continue to receive care in the home. Your estate plan can include detailed instructions for providing care for your child, including naming a guardian. You can do this in your will, naming someone you trust to act as your child’s guardian after you pass away. You can also create a power of attorney document to permit someone you trust to make decisions on behalf of your child in the event you’re incapacitated.
Creating a Special Needs Trust
A special needs trust (SNT) is a vital tool for managing the long-term care and financial stability of a disabled family member. SNTs ensure that the beneficiary can benefit from the assets in the trust. However, because the beneficiary has no direct control over the trust, the trust is not considered income or an asset when applying for government benefits(like Medicaid and SSI).
The trust can cover needs your child’s benefits do not, such as medical care, educational programs, life skills classes, transportation, and recreational activities. This allows your child to live a fulfilling and more independent life.
Trusts require a trustee to manage them. A trustee has significant fiduciary duties; if you do not have someone in your life who you trust to manage the trust, consider talking to your estate planning lawyer about providing trustee services or helping you vet potential trustees. If you or a family member will be the trustee, don’t forget to name a successor trustee so that if something happens to the initial trustee, your child’s SNT will still be properly managed.
The next step in establishing your SNT is funding it. You may be surprised about what you can place in the trust:
- Life insurance policies
- Savings and investment accounts
- Real estate, such as placing a house in the trust for the beneficiary to live in
If you have more than one child, part of estate planning should include a frank conversation with all your children about the potential unequal distribution of assets. Explain the need to ensure that the child’s needs are met for the rest of their life is part of your consideration when creating the estate plan in the manner you did.
Planning for the Future With Your Estate Planning Attorney
SNTs can be a valuable part of your estate plan if you are the parent of a special needs child, but they must be properly set up to be effective.
