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Knowledge is Power

Parents of children with special needs are blessed with joys and challenges that require careful thought and additional planning. Caring and supporting your child with additional needs can be so challenging that it is difficult to take time to plan for when you can no longer provide for them. However, it is vastly important to take the time to consider how your child’s financial, medical, and social needs will be met if you can no longer oversee their care. Careful planning can ensure that your loving care will live on.

Parents should caution against simply leaving everything to their child outright in their will or trust. Additionally, naming a person with special needs as the beneficiary on a life insurance policy, IRA, 401k, or other medium that provides an outright distribution should not be done. If money is transferred to SSI, Medicare, or Medicaid it could trigger them to discontinue benefits as the child is seen to have enough funds to pay for their own care. Most governmental benefit programs will disqualify persons when and if they receive income greater than a particular amount, usually $2000.00.

One of the most useful planning tools is called a Supplemental or Special Needs Trust (SNT). This estate planning mechanism allows persons with special needs and disabilities to maintain their eligibility to receive government benefits such as SSI, Medicare, Medicaid. The purpose and function of an SNT is to preserve a beneficiary’s eligibility for public benefits and to supplement when those programs cannot meet the full amount of the need. The SNT is meant to provide for and to supplement that which is not covered by traditional government benefit programs. Regardless if you end up creating an SNT, make sure to take the time to speak with an estate planning attorney and consider the best options to protect and provide for your child.

 

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