Top 5 Estate Planning Tips for Parents of a Special Need Child

Making a plan to protect your special needs child is essential. It provides peace of mind by ensuring their medical, financial, and social needs are met. It can also protect their eligibility for government benefits. Unfortunately, families are often unaware of their mistakes when making a special needs plan.

This article gives you tips when planning for a special needs child. When making such plans, it’s a good idea to talk to an estate planning attorney in your area. An attorney can give you legal advice about your specific situation. They can also help you make any legal documents you need.

1. Get Organized

Gather all the necessary information to ensure your special needs child will thrive. Make a list of family members and loved ones who take part in your child’s care. Also, collect the names and contact information of important people in your child’s life. For instance, the following:

• Health care providers
• Emergency contacts
• Financial planners

Documenting your child’s medical history and current medical care requirements is a good idea. Also, make a chart showing your child’s income sources and financial accounts.

2. Set Up a Special Needs Trust

A special needs trust (SNT) is central to many special needs estate plans. An SNT is a type of trust designed to meet the financial needs of your special needs child. It’s an irrevocable trust that provides asset protection. It also doesn’t interfere with your child’s eligibility for public benefit programs like Medicaid and Supplemental Security Income (SSI).

An SNT works by moving assets to the trust. A trustee manages the trust assets. The trustee also makes distributions from the trust to your child. In this case, your child is the trust beneficiary. You can specify how the trustee should make the distributions in the trust document. You can also specify what expenses the distributions can pay for.

An SNT often doesn’t replace public benefits programs. Instead, it supplements them. So money from the trust should go to expenses public assistance won’t pay for.

3. Write a Letter of Intent

A letter of intent (LOI) can be essential to special needs planning. An LOI is a non-legal document. You can use it to give valuable advice to your child’s caregiver to ensure they properly care for your child. Typical items included in an LOI are the following:

• Your child’s daily routine
• How your child likes to communicate
• Your child’s favorite social activities
• Your child’s living arrangements

4. Remove Your Child’s Name From Assets

You must ensure your child keeps their eligibility for public benefits. So, your child shouldn’t own assets that would disqualify them from public assistance. An SNT is a good tool because it owns the assets, not your child.

Receiving a large sum of money could put your child’s benefits at risk. For instance, an inheritance or a life insurance payout could cause problems. Be sure to tell relatives who may leave your child a significant gift in their estate plan about your child’s SNT. Directing these large payments to the SNT instead of your child is best.

5. Consider a Life Insurance Policy

It is vital to assess your financial situation. You must leave enough funds to cover your child’s future needs. Life insurance is one way you can fund an SNT. An attorney and financial planner can help you make a plan that meets your goals. Be sure to name your child’s SNT as the policy beneficiary.

Contact an Estate Planning Attorney for Help

Planning for a special needs child is complex. There’s a lot to do to ensure their caregivers are prepared to meet their financial, medical, and social needs. An experienced estate planning attorney can help. They can give you legal advice and help you draft the necessary documents.