A special needs plan is a necessary part of any estate plan for individuals with special needs family members. Whether you have a child with a disability, or an adult family member who is unable to care for his or her own financial or personal affairs because of a disability or some other incapacity, special needs planning is essential. While there are many potential mistakes that could ultimately ruin your efforts, this article will discuss a few big mistakes to avoid in special needs planning.
Why do I need a special needs plan?
If you have ever cared for a disabled person, you are familiar with what it takes to properly care for them, including both medical and personal needs. If your loved-one receives assistance from a need-based government programs, such as Medicaid and/or Supplemental Security Income (SSI), then it is necessary to also protect their eligibility for those benefits programs, while still providing for their care. Special needs planning is designed to do just that.
Relying entirely on other family members
An assumption that far too many parents of special needs children make, is that family members will automatically provide the care their child needs, should the parents die, or are no longer able to provide that care. Whether or not that may be true, parents should not neglect to provide at least a foundation for that care, if for nothing else than to provide continuity of care. At a minimum, your special needs child should have the security that a special needs plan can provide, as special needs care can be complicated and expensive, depending on the nature of the disability or incapacity.
Failing to fund a special needs trust
Generally speaking, a special needs trust should form the foundation of any special needs plan you create for the benefit of someone with disabilities. Put another way, a special needs trust is an essential part of all special needs planning. It is the special needs trust that will own and protect the assets set aside to provide the care your loved one needs. However, simply creating the special needs trust document is not sufficient. The property must also be transferred or “funded” to the trust. Usually, this simply means transferring the property into the name of the trust. If the funding process is not completed successfully, then your trust will be flawed, leaving your child’s future unprotected.
Putting off the creation of your special needs plan
The worst mistake you can make is to procrastinate. The truth is, every person with special needs can benefit immensely from having a special needs plan in place. This should be done as soon as possible, before the unthinkable happens, and you are killed or incapacitated before you can complete your special needs planning. If this were to happen, your loved one with special needs may be left to rely on others, who may or not be equipped to do so properly. That is the last thing a parent would want to happen, so plan now.
If you have questions regarding special needs trusts, or any other special needs planning issues, please contact Sexton, Bailey Attorneys, PA online or by calling us at (470) 443-0062.
- Low-Interest Loans: An Estate Planning Technique - June 23, 2020
- Irrevocable Medicaid Trusts - June 16, 2020
- Uncompensated Transfers - June 9, 2020
Leave a Reply