- Tel: 561-686-6200
- Fax: 561-686-0303
Every parent wants to ensure that their children are taken care of after they pass away. Designing a will, trust, and other aspects of an estate plan that ensures the welfare of the decedent’s children is one of the key components of estate planning. If you have a child with a disability, even an adult child, how you design your estate plan could have a significant and long-lasting effect on whether your child gets the care they need after your passing. If you leave them too much inheritance, for example, they may be financially secure for a time but ultimately ineligible for need-based aid from the government. If the inheritance runs out, their financial security could then be in jeopardy.
Read on for tips on how to create a special needs estate plan that will ensure your child is not left without the proper financial resources or eligibility for needs-based government aid programs necessary to keep them taken care of.
Special needs trusts are a key component for many special needs estate plans. Special needs trusts are discretionary spendthrift trusts created for a disabled or elderly person that allow the beneficiary to receive benefits that supplement public benefits without ruining their eligibility to receive those public benefits. Public benefits may include programs such as Supplemental Security Income, Medicaid, Section 8 Housing, and other federal or state-sponsored assistance programs.
A special needs trust can be used, for example, to:
For a special needs trust to be effective and avoid ruining eligibility for need-based aid, the beneficiary of the trust must not have the authority to order a distribution, and they cannot have the authority to revoke the trust. A professional Life Care Planner and a dedicated trust & estates attorney can help you determine the appropriate amount of funding for a special needs trust.
Life insurance can be a great accessory to a special needs plan, especially if you lack the liquid funds necessary to furnish a comprehensive special needs trust. The proceeds of a life insurance policy can be paid directly into a special needs trust, avoiding probate and the estate tax. Your special needs planning attorney can help you design a life insurance plan that names the appropriate beneficiary and contains sufficient coverage to ensure that your child is well-covered after your passing.
Achieving a Better Life Experience (ABLE) accounts are savings accounts that are designed for individuals with disabilities. ABLE accounts are available to individuals who became disabled before age 26; they allow those people to set aside a certain amount of income each year in tax-free savings without affecting eligibility for government benefits. The income can come from disabled individuals themselves or from other people who want to provide them with funds.
The federal rules regarding ABLE accounts recently changed, so it is important to consult with a knowledgeable trust and estates attorney to determine how best to set up your child’s ABLE account and ensure that they have a steady stream of income without affecting eligibility for needs-based programs.
If you believe that your adult child with needs would benefit from a guardianship, it is important to start the process early. Depending on your location, the application process can take up to a year. Your special needs planning attorney can help you determine if guardianship is appropriate or if there are better alternatives available.
A special needs planning attorney can help protect your family, creating an estate and special needs plan tailored to your needs and circumstances. We will evaluate your circumstances and those of your family to determine the best type of will, trust, and other legal documents and mechanisms available that will benefit your family the greatest. Contact the talented, effective, and compassionate West Palm Beach trust and estates attorneys Shalloway & Shalloway at 561-686-6200.