Considerations when developing an estate plan for families with Special Needs

An estate plan begins with a will or establishing a living trust which are all about providing instructions about whom you want to be as your beneficiaries, what you want them to receive, and when they’re to receive it.

However, when it comes to establishing an estate plan for parents of Special Needs children or children with disabilities, this can present with more challenges.  A big part of the challenge of setting up an estate plan for a Special Needs child is not knowing the type of and extent of care that they will need when they become adults and if they will be eligible to receive government benefits upon turning 18.

Therefore, it’s important that you discuss and review all of your legal options with an attorney who is experienced in estate planning, and, specifically, for Special Needs adult children.  They can assist you in developing a plan that meets your specific needs as well as those of your child.

If you have considerable assets, you may choose not to have your child receive any government benefits.  In this type of scenario, you can establish a discretionary trust that will distribute income and principal at the discretion of the trustee in order to benefit your child throughout his or her lifetime.

However, if you’re planning on having your child receive government benefits, then you’ll want to consider setting up at “Special Needs Trust.” The goal of this type of trust is to supplement any and all government benefits that your child will receive. There are specific rules for how the assets placed in this type of trust are to be used. Examples include vacation trips, purchase of a house, or car — things that aren’t provided for by government benefits.

More than financial plans

Estate planning for Special Needs children is about more than simply creating a plan that ensures the financial security of your Special Needs child. It’s about creating a plan that ensures that your child will continue to receive the best possible care when you can no longer provide that care yourself.

With that in mind, some parents opt to adopt somewhat of a “hybrid” approach by disinheriting their Special Needs child while, at the same time, leaving more assets to other siblings with the understanding that they will care for their Special Needs sibling.

While it sounds like a good option, there are a number of reasons why this is not advisable. First and foremost is that the siblings have no legal obligations to care for their Special Needs brother or sister. And, those same assets are vulnerable if the siblings are sued by a creditor or involved in a divorce.

It’s clear that estate planning for your child with Special Needs is going to present challenges and hurdles that you must get over to help you child live a full and productive life.

Estate planning for your entire family

The Law Office of David W. Foley, estate planning attorney in San Diego, specializes in creating living trusts, including Special Needs and other types of trusts, as part of an estate plan. We’ll provide the guidance you need in order to choose the trust the best provides for your child along with all of the necessary living trust forms.

As a living trust attorney in practice since 1990, David Foley understands the importance of protecting your inheritance for your loved ones, especially your Special Needs child.

Contact our office today to set up a consultation.

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