All children are a blessing. From the day they are born, you begin making plans to ensure that your child or grandchild has a bright future. What will their interests be? What job will they have? Who will they marry? While these are common concerns for most families, for those with a special needs child or grandchild, taking steps to ensure they have a safe, happy, and healthy future is even more important due to the additional hurdles they may face. To help provide a prosperous future for your special needs child or grandchild, we suggest the following steps:
1. Have a Special/Supplemental Needs Trust Prepared
One of the first things you can do in your estate planning is establish a special or supplemental needs trust (SNT) for the benefit of your child or grandchild. An SNT is a special type of trust designed to set aside money and property for the benefit of a beneficiary who may qualify for public assistance for medical and other care expenses as a result of his or her disabilities. This type of trust can be added to an existing trust, or it can be drafted as a standalone trust.
Because most government programs providing aid to disabled individuals have strict requirements about how much money and property a person can own and how much money they can receive on a regular basis, it is important to make sure that any inheritance your special needs child or grandchild receives is structured in a way that will not disqualify them from receiving the government benefits. Even if your child or grandchild is not currently receiving government benefits, this does not mean that they will never receive them. When planning for their future, we want to make sure that we are maximizing all opportunities available to them, not limiting those opportunities. To accomplish this, it is crucial that the trust be carefully drafted by an attorney who is familiar with the eligibility requirements for government benefits.
In addition to providing for your child’s or grandchild’s financial future, an SNT allows you to appoint a care manager or an advisory committee. As opposed to a trustee, whose job is to manage the money and property in the trust and make distributions, the care manager acts as your child’s or grandchild’s advocate. Depending upon the level of care your child or grandchild needs, the care manager may only need to check on them periodically or may be responsible for their day-to-day care. For those needing more assistance, the care manager may also serve as part of an advisory committee made up of multiple friends, family, and/or professionals. As an advocate, the care manager or advisory committee can advise the trustee about the beneficiary’s needs and the best ways to use the funds.
Within the SNT, a statement of intent can be included to instruct the trustee, and if necessary, the court, as to why the trust was established and how the money and property should be used. Although your intentions may seem obvious, including this section in the SNT can act as a safety net should there be a change in the law causing the special needs beneficiary to become ineligible for government benefits. If you include a statement of intent, it can be easier to change the trust to ensure that your original objective is carried out after you have passed away in the event of unforeseen changes.
See also "Protecting your Special Beneficiaries (Part 2)"
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