For many people, the basics of estate planning are simple enough, but for those families with loved ones who are disabled or have special needs, the special needs estate planning process is more involved – and definitely more critical.
The latest statistics show that five percent of minor children have some sort of disability, and the burden of caring for these children make estate planning essential. In addition to specialized health care, these children usually need special schooling and intensive therapy, all of which comes at a cost.
Here are some tips for parents facing the need to plan not only for their own financial future, but for that of a special needs child:
Deal with expectations. Parents need to think about the kind of life they envision for their child. Will the child have a shorter life span? Will he or she be able to work or live independently? The answers to these questions will form the foundation of your plan.
Determine eligibility for public benefits. In order to meet eligibility requirements for Medicaid and Social Security Supplemental Income programs, a person with special needs or other disabilities cannot have more than $2,000 in assets. This makes it imperative that a child who could benefit from these services not have any assets titled in his or her own name – meaning they should not be listed as beneficiaries on life insurance policies, retirement accounts or plans, in trusts, wills or pensions.
Consider a special needs trust. Assets placed in a third-party special needs trust are not counted as assets toward public benefit program eligibility, but these trusts are governed by strict rules so the counsel of a Personal Family Lawyer in establishing this trust is necessary. Parents who are unable to fund a special needs trust with cash while they are still alive can do so through life insurance proceeds after they die.
A Note from the Attorney, Stan Pierchoski:
The practice of law is a second career for me. After obtaining Master of Science degrees in both Nuclear and Mechanical Engineering, I worked in the Nuclear Power Industry for 15 years. Always having an interest in law, I attended and graduated from law school and founded the Pierchoski Law Firm in 2002 in Pulaski, TN. For several years I practiced as a criminal defense, trial attorney. After my parents passed I became interested in Trust and Estate Law and felt a strong calling to change my practice to the Estate Planning area.
For years I have been exclusively doing trust writing and wealth planning and have become proficient at it. Over the last several years my practice has evolved to serve all age groups including elders and Medicaid Planning. I am always open to your questions and am more than happy to chat with you about your concerns so give me a call or stop by my office. You’ll be glad you did!