Smaller Print Larger Print
800-336-4529 618-985-4529
.  Every individual who owns a home or other real estate and everyone who owns financial assets or tangible personal property worth more than a few thousand dollars ought to plan for the possibility that those assets will need to be used in the event of their disability and, certainly, for final disposition upon their death.

Life Care Planning, Estate Protection, Disability,
VA & Medicaid Assistance Lawyers

Multi-Generational Planning Part 2

Multi-Generational Planning

Part 2 of 2

 

Estate planning is not just for the elderly.  Every individual over the age of 18 ought to have an advance medical directive.  Every young married couple with children ought to plan for the possibility of their deaths and that their children will need to be raised by someone else.  Every individual who owns a home or other real estate and everyone who owns financial assets or tangible personal property worth more than a few thousand dollars ought to plan for the possibility that those assets will need to be used in the event of their disability and, certainly, for final disposition upon their death.

 

Five Planning Pointers for Parents with Children with Special Needs

 

In last month's article on multi-generational planning, we discussed the pros and cons of making gifts to children and grandchildren.  In this second of two parts, we cover planning for disabled children, otherwise known as persons with special needs.

 

1.         Buy enough life insurance. A parent is irreplaceable, but someone will have to fill in if the worst happens. It may be siblings or other relatives. In all likelihood, that family will have to pay for at least some services the parent or parents had provided when able. If the estate is not large enough for this purpose, it can be made large enough through life insurance proceeds. Premiums for second-to-die insurance (which pays off only when the second of two parents passes away) can be surprisingly low.

 

2.         Set up a trust. Any funds left for a child with special needs, whether from an estate or the proceeds of a life insurance policy, should be held in trust for his or her benefit.  Leaving money for anyone with a special need jeopardizes medical and other public benefits. Many people with special needs cannot manage funds - especially large amounts. Some families disinherit children with special needs, relying on their siblings to care for them. This approach is fraught with potential problems. Siblings can be sued, get divorced, disagree on their responsibilities, or run off with the funds.  It can also cause tax problems for the siblings. The best approach is a trust fund set aside for the child with special needs.

 

3.         Create a will or other legal document to name a guardian. While a Last Will and Testament (or a Designation of Guardian) that names a guardian is important for anyone with minor children, it is doubly so if the child has special needs.  Finding the right guardian can be difficult. In some cases, the care needs of the child may be so demanding that he or she will need a different guardian from his or her siblings. The child's parents need to make these determinations while they can. A Last Will and Testament or a stand-alone Designation of Guardian are the appropriate vehicles for doing this.

 

An adult child may also require a guardian when the parent can no longer serve in this role (whether officially appointed or not). It will probably not be legally possible to officially appoint a successor guardian once the parent is out of the picture.  So, it may make sense to begin making the transition to a new guardian while the parent is able to assist in the process. This can be in the form of a stand-by guardian, co-guardianship, or passing the baton to a successor guardian.

 

4.         Write down the care plan.   All parents caring for children with special needs are advised to write down what any successor caregiver would need to know about the child and what the parent's wishes are for his or her care. Should the child be in a group home, live with a parent, be on his or her own? Usually, the parent knows best, but needs to pass on the information. The memo or letter can be kept in the attorney's files with the parent's estate plan.

 

5.         Coordinate with other family members.  Even a carefully developed plan can be sabotaged by a well-meaning relative who leaves money directly to the child with a special need. If a trust is created for the benefit of the child, grandparents and other family members should be told about it so that they can direct any bequest they may like to leave to that child through the trust.

 

What Are 'Special Needs' in Special Needs Trusts?

 

Government programs like Medicaid and Supplemental Security Income (SSI) provide essentials, such as medical care, food, clothing, and shelter. Special needs trusts are designed to supplement, not replace, this kind of basic support. Such trusts pay for comforts and luxuries -- "special needs" -- that could not be paid for by public assistance funds.

 

What are these "special needs"? A special needs trust has been likened to a "parent's pocket" - that is, it pays for the kinds of things that a parent would just reach into his or her pocket to cover.

 

These trusts typically pay for things like education, recreation, counseling, and medical attention beyond the simple necessities of life. (However, the trustee can use trust funds for food, clothing, and shelter if the trustee decides doing so is in the beneficiary's best interest despite a possible loss or reduction in public assistance.)

 

The following are some examples of expenses that a special needs trust might cover:

 

●          Medical and dental expenses not covered elsewhere

●          Special equipment like wheelchairs or specially-equipped vans

●          Therapy or rehabilitation services

●          Training and education

●          Payments for a care companion

●          Travel, which can include the cost of a companion

●          Electronic equipment and appliances, computers

●          Legal or guardianship expenses

●          Insurance

●          Burial expenses

●          Recreation and entertainment (summer camp, movies or social events, videos, sports equipment)

 

Richard Habiger is an elder law and special needs planning attorney.  You may contact him at 618-549-4529 or Richard@HabigerElderLaw.com.

 

 


Contact Us

Name *

Phone *

Email *

Tell us more *


Physical Address
1808 Clark Street, Carterville, Illinois 62918
Phone: 618-985-4529
Toll Free: 800-336-4529
Get Directions

Mailing Address
1808 Clark Street
Carterville, Illinois 62918
Phone: (618) 985-4529
Get Directions

Offices

Physical Address
1808 Clark Street, Carterville, Illinois 62918
Phone: 618-985-4529
Toll Free: 800-336-4529

Mailing Address
1808 Clark Street
Carterville, Illinois 62918
Phone: (618) 985-4529