For parents or relatives of special needs individuals, an estate plan that supplements public benefits and provides for the individual’s continued care is a primary goal. A well-devised estate plan can help a disabled individual continue to receive therapy and quality, life-enhancing resources long after the death of his or her parents.

Challenges of Special Needs Estate Planning

Simply leaving an inheritance to a special needs individual can often be worse than disinheritance, because holding assets in excess of $2,000 can disqualify the special needs child from Supplemental Security Income (SSI) and Medicaid. A special needs trust is typically used to provide for the beneficiary without disqualifying them from assistance.

Special needs planning should be coordinated with other family members, such as grandparents or siblings, who may wish to leave an inheritance for the special needs child. An inheritance from any family member could result in disqualification from benefits.

An estate plan that is fair to a person’s other children can be a challenge to develop. The special needs child typically has the greatest need, as support from parents or an inheritance may be the only available supplement to public benefits. At the same time, parents often still want to leave some assets to their other surviving children.

Considerations in Special Needs Planning

The special needs planning process can vary based on the trust beneficiary’s needs and on the parents’ financial situation. As the planning process begins, it is important to carefully consider these factors. Depending on the beneficiary’s level of function, he or she may or may not be included in this discussion.

Important information to gather includes:

  • What is the beneficiary’s diagnosis and level of function?
  • What diet and special equipment does the beneficiary require?
  • What benefits, such as SSI and Medicaid, is the beneficiary currently receiving, and how much are those benefits worth?
  • Does the beneficiary currently hold any assets, and how much are those assets worth?
  • Which family members will continue to be involved with the beneficiary’s care in the future?
  • Where does the beneficiary live, and what is the desired living arrangement for him or her?
  • What recreational activities does the beneficiary like to participate in?
  • What resources are available to fund the beneficiary’s future care?

Special Needs Planning Documents

Special needs planning should, at a minimum, include the following documents:

  • Healthcare power of attorney
  • Financial power of attorney, which grants the agent the ability to make discretionary nonsupport distributions for the benefit of the child
  • Last will and testament
  • Revocable living trust, which permits the trustee to make discretionary nonsupport distributions for the child’s benefit
  • Special needs trust

Hook Law Center can assist you in your special needs planning.

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