The AARP says that about 6 in 10 adults in the U.S. do not have a will. You don't want something to happen to you and leave your family to pick up the pieces. As you enter your senior years, it's important that you add estate planning to your to-do list. Estate planning is especially important for couples that have a child with special needs. Take a look at why this is important.
Traditional Inheritances Aren't the Best for Special Needs Children
If you leave an inheritance for your child, the government has the right to cut off medial coverage and benefits until this inheritance fund runs out. In order for children to retain their government benefits, some parents may disinherit their children, not realizing that they have other options at their disposal.
Conversely, if a parent does leave money for a child, the child with special needs may run through a substantial inheritance without thought of extending that money for the entirety of their life. If you don't want your child to be without an inheritance, but you don't want government medical coverage to end, ask an elder lawyer about setting up a special needs trust.
What is a Special Needs Trust?
To go over the basics, a trust is a fiduciary relationship where you — the settlor — set up a transfer of property (e.g., real estate, heirlooms, finances, etc.) to a beneficiary, your child. However, this trust is managed by the trustee, someone you designate to make sure the beneficiary is taken care of and administers the legal obligations outlined in your will.
A special needs trust is unique because it gives you a loophole to provide your child with an inheritance while they still receive SSI or Medicaid benefits. In order for your child to receive these benefits, he or she must be disabled and under the age of 65. The rules of special needs trusts changes regularly, so you need to have your attorney help you stay up to date.
Besides a Trust, What Else Should Be Done?
You should set your child up with a lockbox or another safe place where they can access important documents for the trustee and any future caregivers. You should include documents that outline:
- Funeral arrangements, such as whether you want a burial or cremation or what kind of services you'd like to be held
- Financial directives (e.g., living wills or power of attorney)
- Details of your child's likes, dislikes, routine, and other pertinent information that will make him or her comfortable (this can be drafted in a letter of intent with the help of your lawyer)
- Locations of major assets, such as bank account numbers
- Government benefits your child should receive
While going through estate planning can be overwhelming, you will feel much better knowing that your child will be cared for after your passing. Talk with an elder law attorney today for more information.