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 estate planning process is more involved – and definitely more critical.
Many 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 an estate planning attorney 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.
One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.