Special Needs Planning for my Special Needs Child
Special needs planning for your child is critical to ensuring that your child will be protected upon your incapacity or passing.
We all want what is best for our children, when they are young and also when they get older. But what about your special needs child, who will grow older, but still be dependent on you and others. He or she may need a lot of care as he or she ages and may not be able to manage his or her own money alone. How can you best take care of your special needs child as he or she grows older? And how can you plan for him or her when you are no longer around, to make sure there is someone to look out for your special needs child and to make sure he or she is financially taken care of.
Why Engage in Special Needs Planning?
Estate Planning for your special needs child is critical to ensuring that he or she gets the necessary and available resources to which he or she may be entitled (e.g. Medicaid, Medicare, SSI or SSD, Section 8) while making sure that whatever assistance you provide, does not disrupt or disqualify your special needs child from receiving such benefits. While public benefits will benefit your special needs child, sometimes it is just not enough and you need to or want to use your resources to increase the quality of life for your loved one. However, without the proper planning, you may jeopardize the government benefits when you do not need to. Also, even if your special needs child is not receiving public benefits, outright gifts to him or her may not be wise, particularly if he or she is not able to manage these assets on his or her own. As with all planning, you want it to be your plan, not someone else’s. How do you ensure that? By putting an appropriate plan in place and planning in advance.
What are the Different Planning Opportunities for my Special Needs Child?
You no longer need to disinherit your special needs child, or provide that the money can go to one person and then hope that the person will actually expend the money on your special needs child.
Instead, there are several estate planning opportunities available when planning for your special needs child.
- Supplemental Needs Trust. A supplemental Needs Trust (SNT) is a mechanism which allows you to leave money for the benefit of a disabled individual, while also allowing that individual to maintain their public benefits. You will need to choose a Trustee of this Supplemental Needs Trust. The SNT can be set up in either your Will or your Living Trust.
- A Pooled Trust. When choosing a Trustee is difficult, or when you want professional management of your disabled beneficiary’s assets, you may want to choose a Pooled Trust instead of an SNT. A Pooled Trust is run by an organization, such as NYSARC. You can leave a specific bequest in a Will or a Trust for a sum of money to be distributed to the Pooled Trust upon your death.
- Advance Directives. In addition to establishing a mechanism for money to be set aside for your special needs child, you may want to consider who will take care of that special needs child. Once the special needs child becomes the age of majority, which in New York is age 18, even as the parent, you no longer have legal authority to handle his or her affairs, despite being his mother or father. If your special needs child’s disability is physical rather than mental, perhaps he or she may be able to execute a Power of Attorney and Health Care Proxy designating you or another loved one as agent to manage his or her affairs.
- Guardianship. However, if the disability is such that he or she does not have sufficient capacity to do so, in order to have legal authority to manage his or her money or make medical and personal needs care decisions, you will need to petition a Court to be appointed as Guardian. In New York, you have the option of petitioning to be guardian in Surrogate’s Court under an Article 71a proceeding, or in Supreme Court under an Article 81 proceeding. Each one has its benefits and drawbacks. One common benefit to taking care of this right away, is that you can request that the Court appoint a standby guardian, in case you are no longer able to act as the guardian.
What if I Don’t Create a Plan?
If you do not do estate planning for your special needs child, you risk leaving your money outright to the child who may then lose his or her much needed government entitlements, which you probably spent a long time making sure they are on.
We can help you structure an estate plan that takes your special needs child into account.
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