Estate planning is a process that ensures that your assets are distributed as per your wishes after you pass away. For families with special needs children, estate planning takes on added importance. |
Special needs children require more support and care throughout their lives, and it’s better to have a plan in place to make sure that their needs are fulfilled.
In this article, we will discuss the importance and need of estate planning for families with special needs children and provide guidance on how to create an effective plan.
The Importance Of Estate Planning For Families With Special Needs Children Families with special needs children have unique challenges when it comes to estate planning. Special needs children generally require more support than normal children.
Both, during their lifetime and after their parents pass away. They may require specialized medical care, therapy, or other services that can be costly. Also, they may not be able to manage their finances on their own or make decisions on their own.
In the absence of proper estate planning, special needs children may not receive the support they require after their parents pass away. Their inheritance may disqualify them from receiving government benefits.
They may not have the financial resources to meet their ongoing needs. Estate planning can help ensure that special needs children are taken care of. Even after their parents are no longer able to provide for them.
Steps To Creating An Effective Estate Plan For Families With Special Needs Children
Create A Special Needs Trust A Special Needs Trust (SNT) is a trust that is particularly designed to provide for the needs of special needs children. The trust can be used to provide for the child’s ongoing care, medical expenses, education, and other needs.
Importantly, assets held in an SNT do not disqualify the child from receiving government benefits like Medicaid and Supplemental Security Income (SSI).
When creating an SNT, it’s important to name a trustee who is familiar with the child’s needs and can manage the trust’s assets in the child’s best interest. The trustee should have a deep understanding of the child’s needs and be able to make decisions that align with the child’s best interests.
Name A Guardian
Naming a guardian is another important step in estate planning for families with special needs children. A guardian is someone who will be responsible for the child’s care if both parents pass away.
It’s important to choose a guardian who is familiar with the child’s needs and can provide the care and support that the child requires.
When choosing a guardian, consider their financial situation, their relationship with the child, and their willingness and ability to provide for the child’s ongoing needs.
It’s also advisable to discuss the responsibility with the potential guardian and ensure that they are willing and able to take on the role.
Consider Life Insurance
Life insurance can be an effective and practical way to provide for special needs children after their parents pass away. The proceeds from a life insurance policy can be used to fund an SNT or provide ongoing support for the child’s needs.
When considering life insurance, it’s important to ensure that the policy’s beneficiary designation is consistent with the overall estate plan. The policy’s proceeds should be directed to the SNT or the child’s guardian, rather than directly to the child.
Plan for Government Benefits
Special needs children may be eligible for government benefits like Medicaid and SSI. These benefits provide vital support for children with disabilities. But, they also have strict eligibility requirements.
In order to receive these benefits, the child’s assets and income must fall below certain limits.
When making an estate plan, it’s advisable to ensure that the child’s inheritance does not disqualify them from receiving government benefits. This is where an SNT can be particularly useful.
Assets held in an SNT are not considered the child’s income or assets. Thus, do not disqualify them from receiving government benefits.
Review And Update The Estate Plan
Finally, it’s important to review and update your estate plan periodically. The needs of special needs children can change over time. It’s important to ensure that the estate plan reflects these changes. Also, changes in the law or your financial situation may require adjustments to the estate plan.
Reviewing the estate plan periodically can help ensure that the plan remains effective in providing for the needs of special needs children.
In conclusion, estate planning for families with special needs children is a complex process that requires careful consideration and planning.
Creating a Special Needs Trust, naming a guardian, considering life insurance, planning for government benefits, and reviewing and updating the estate plan are all essential steps in creating an effective estate plan.
It’s important to work with an experienced estate planning attorney who can guide you through the process and ensure that your plan aligns with your goals and objectives.
With proper planning, families with special needs children can ensure that their children receive the support and care they need. Even after their parents are no longer able to provide for them.
About The Author
Jim Turner is a USA-based author on Legal issues related to estate planning, will and trust business law, and elder law. Jim Turner does her best writing on these topics that help users to find the best solutions to their FAQ on estate planning, probate laws, special needs trust, and more about legal family issues. The author can be reached at https://rochesterlawcenter.com
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