Planning for a special needs child comes with a lot of extra concerns: how will the child be cared for? What kinds of things will government benefits cover or not cover? How do I make sure I don’t jeopardize any of those government benefits, especially any medical benefits? While this is certainly a complex issue, here are some of the basics:
The biggest concern in planning for a special needs beneficiary is making sure they are provided for, with enough funds available to cover any medical, housing or other care needs, but without jeopardizing eligibility for government benefits. It’s often a tightrope walk and can be very frustrating for those just looking to provide for their loved ones.
Some planners have historically been so concerned about the potential for disqualifying individuals from government benefits that they suggest disinheriting special needs beneficiaries altogether. As more sophisticated planning strategies become more well-known, this practice has become less common. There are specific types of trusts that can actually provide for a special needs beneficiary without putting their benefits in jeopardy.
Working with a qualified attorney to create these trusts is the wisest decision; an attorney will know what language to include to prevent a trustee from making any payments that would render a beneficiary ineligible. There are also certain planning techniques—such as a D(4)A trust—that can help even if a special needs beneficiary may have inherited significant assets (from a grandparent, perhaps) that might otherwise disqualify them.
If your special needs beneficiary is your child, nephew, niece, grandchild, or great-grandchild, an experienced estate planning attorney can help you include language in a trust that would contain the necessary special needs provisions for the beneficiary.
While there are many planning techniques available, many people are unaware of the options available to them. Working with an experienced estate planning who specializes in this type of special needs planning can help ease the planning process and give you the confidence that your special needs beneficiary will be taken care of after you’re gone.
If you would like more information, explore our website and take a look at our Special Needs Planning section. Or take a look at Vinnie’s appearance on Money Talk before contacting our office to schedule a consultation!
Reference: Money Talk (January 16, 2016) “Special Needs Estate Planning”