Special Planning for Special Needs

Estate planning takes on a greater importance if you have a special needs beneficiary. Many parents struggle with preparing to care for their child with autism, Down Syndrome, or mental or physical disabilities after they are gone. Here are just a few steps or issues to consider.

Special needs

Step One: Create a will naming who will be guardian and conservator for your child should a court need to appoint one. These individuals would be responsible for your child’s daily needs and care, as well as manage any monies that you leave to them.

Step Two: Decide if you want to leave a higher percentage of your assets to the beneficiary with additional needs. Some parents choose to leave monies equally between their children. There is no right or wrong answer.  We recommend sharing your decision with other family members so they understand your decision.

Step Three: Know that leaving money to a child through a will or beneficiary form may disrupt government benefits. Assets of more than $2,000 can cause an individual to be disqualified from benefits such as Social Security Disability,  Medicaid, or other government benefits.

Step Four: Speak to a qualified special needs planning attorney to see if you should establish a special needs trust for your beneficiary. These trusts are specifically designed to supplement other income and allow the individual to maintain their government benefits.

Step Five: Be cautious! Many parents leave money to a sibling with instructions to care for the special needs child. Although this may be well-intentioned, it is fraught with planning errors. For example, the healthy sibling may go through a messy divorce, have creditor issues, or need to file bankruptcy—any of which may jeopardize these funds being utilized for the benefit of the special needs beneficiary.

Special needs planning is complex.  It is critical to plan properly to ensure your beneficiary with special needs is not inadvertently disqualified from government benefits.  Consult with an attorney to ensure your loved one will be protected when you are longer here to care and provide for them yourself.

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