ESTATE PLAN | DECEMBER 2023

Navigating the Estate Planning Process for Families with Special Needs Dependents
Navigating the complexities of estate planning for families with special needs dependents requires thoughtful consideration and specialized knowledge. The goal is to ensure your loved one's well-being and financial security while protecting their eligibility for government benefits. A planned approach helps you overcome challenges during this process.
 
Those who fall into this demographic face unique challenges, and understanding these challenges is vital. Challenges may include:
  • Means-tested benefits: Many essential programs like Medicaid and Supplemental Security Income (SSI) have asset limits. Your current and future financial situation can impact your eligibility for certain programs.
  • Planning for future care and decision-making for your loved one is crucial. Thinking about "what-if" can present numerous personal and financial challenges.
  • Long-term financial needs: Consider the ongoing costs of specialized care, therapy, and necessary accommodations.
 
However, there are Key Tools and Strategies that can help you:
  • Special Needs Trust (SNT): A legal document holding assets for your loved one's benefit without affecting their government benefits eligibility. There are two main types:
  • Third-party SNT: Created by someone other than your loved one (you or another family member). It receives assets through your will or during your lifetime.
  • First-party SNT: Established by your loved one if they receive a personal injury settlement or other unexpected windfall.
 
These trusts are pivotal in preserving eligibility for crucial government programs while providing for your loved one's well-being.
 
Estate planning, including wills or living trusts and guardianship designations, provides a holistic approach to future planning while comprehensively addressing legal and financial considerations. It's about creating a framework that ensures your loved one's needs are met in every aspect of their life.
  • Will: A will dictates how your assets are distributed after your death and can designate a guardian for your special needs dependents.
  • Guardianship: Designate a trusted individual or organization to make legal and financial decisions for your loved one if necessary.
  • Life Insurance: Provides an additional layer of financial resources for your loved one's care.
  • ABLE account: A tax-advantaged savings account for individuals with disabilities that can be used for qualified disability expenses without impacting government benefits eligibility.
  • Letter of Intent: A Letter of Intent (LOI) is NOT a legally binding document; however, it may be the most valuable document you can prepare. An LOI will provide first-hand knowledge of how-to best care for your dependent and expectations for the caregiver's role in your dependent's life.
Estate Planning for Families with Special Needs Dependents is an ever-evolving situation. There is no universal solution. It's important to be current on what considerations require focus and what resources are available. Below are additional considerations to keep in mind throughout this process:
  • Funding your plan: Determine how you will fund your special needs trust and other aspects of your estate plan.
  • Regular review and updates: Regularly review and update your estate plan as your circumstances and your dependents' needs change.
  • Professional guidance: Seek professional guidance from an attorney specializing in special needs law and an experienced financial advisor.
  • Emotional Factors: Consider your dependent's emotions, for example:
  • Personality traits and preferences
  • Personal care information such as habits and hygiene,
  • Daily routines
  • Dietary requirements, among others.
 
It is important to also take into consideration the emotions of future caregivers. When faced with the responsibility of caring for a special needs person, a caregiver may feel the same emotions as those you felt upon first learning of your dependent's diagnosis. Putting yourself in their place and looking at it from their perspective is essential. Community: Engage with other families who are also planning for their dependent's future using Facebook, community support groups, online resources, and professional counselors.
 
The importance of seeking professional guidance and consulting with an attorney highlights the need for expertise specializing in special needs law. Attorneys are crucial to ensure your plan is comprehensive and legally sound. They can help you choose the appropriate tools, draft legal documents, and answer your specific questions.
 
Each family's situation is unique. A personalized approach to your loved one's specific needs, coupled with professional assistance knowledgeable in government programs, ensures a tailored and legally sound estate plan. Families can feel empowered to create a legacy beyond financial provisions to secure a loving and supportive future for their special needs dependents.
Posted in: Estate Planning