If you are the parent of a special needs child, estate planning is an essential way of protecting your child’s future. As you cope with your child’s physical and emotional needs in the present, it is critical that you also prepare to meet the requirements of their future. The best way to do this is to work with a skilled, empathic estate planning attorney who has experience assisting families with special needs children. In Cincinnati and the surrounding area, Shaw & Nelson, PLLC is the place to call.
Creating an estate plan for your special needs child will provide you with the peace of mind that comes from setting up a landscape in which they can grow and thrive and one in which they will be well taken care of when you pass away. There are several ways to assist your child in reaching their full potential while enjoying a comfortable lifestyle. Let’s take a look at what they are.
1. Creating a Special Needs Trust
A special needs trust will enable your child to receive the government benefits they deserve (such as Medicaid and Social Security Insurance) while receiving supplemental funds from the trust to make life more comfortable and pleasant.
These government benefits, however, are means-based. It is only by taking the assets out of your child’s ownership and control and putting them into a trust that the child remains eligible to receive them. While government benefits will provide for your child’s basic necessities, the special needs trust can provide money for:
- Medical and dental out-of-pocket expenses
- Education
- Restaurant meals
- Entertainment
- Vacations
In other words, the special needs trust is meant to fund purchases and activities government benefits do not pay for.
2. Creating an ABLE Account
Establishing an ABLE account (in Kentucky known as a STABLE account) is another way to provide your special needs child with funds that will not disqualify them for means-tested government benefits. This type of account allows disabled individuals to hold funds that can grow tax-free and gives them more control over their resources than they would have over a special needs trust. The downside is that ABLE accounts have limits on how much money can be used to establish them and a cap on the amount they can eventually hold.
3. Establishing a Conservatorship or Guardianship
As a concerned parent, you want to make sure your special needs child is well-tended not only during your lifetime but after you die. If you die while your child is still a minor, the person you named in your will as a guardian will take over the parenting role. But what if you die when your child is grown but still unable to be independent? In that case, unless your child has another living parent or sibling capable of taking over, you will have to establish guardianship or conservatorship.
The difference between a guardian and a conservator is that the former has the power to make legal and other decisions about your child’s care and the latter is primarily in control of the child’s finances. Though the guardian or conservator you have named will have to be approved by the court after your death, it is wise to make your choice of an individual known in your estate plan.
4. How Assets for Your Special Needs Child Can Avoid Probate
For a child with a disability, it is especially important to have access to inherited funds as quickly as possible after a parent’s death in case of a medical emergency or other urgent need. Since the probate process can be expensive and delayed by complications, your estate planning attorney can assist you in making sure that your assets have a direct pathway to your child and do not have to go through the probate process.
The following assets can transfer automatically to your beneficiaries when you pass away:
- Real property in which the title is held jointly with the right of survivorship
- Life insurance policies with named beneficiaries
- Retirement policies e.g. IRAs, 401(k)s with named beneficiaries
- Revocable living trusts
- Transfer-on-death (TOD) bank accounts
5. Other Steps You Must Take to Protect Your Special Needs Child
Contemplating the potential incapacity of the parent of a special needs child is particularly troubling since parents with disabled children often have to sign legal documents pertaining to their child’s care.
- Durable Power of Attorney (DOA) – It is, therefore, vitally important that you have your special needs planning attorney draft and execute a Durable Power of Attorney (DOA) for you. This document will give the person you name the ability to sign any necessary legal papers to assist your child, including creating and funding a trust for their benefit.
- Letter of Intent – Working with Shaw & Nelson as your attorneys, you can be sure that your estate plan will include a letter of intent stating clearly and precisely how your child should be cared for after you pass away. Your letter of intent is a personalized document that will include everything you want your child’s caregiver to know about the child’s habits, talents, fears, pleasures, day-to-day activities, physical and emotional needs, preferences, pet peeves, desires, and goals.
Contact Our Experienced Special Needs Estate Planning Attorney Today
At Shaw & Nelson, we are well aware of how overwhelming it is to be the parent of a special needs child. You may feel that you cannot handle the added tasks involved in planning for your child’s future. Fortunately, our highly skilled, compassionate lawyers are ready to do the heavy lifting in terms of legal matters and logistics. Contact us now so we can help you plan and protect your child’s future.