Planning for a Child with Special Needs
On average, Americans are living longer, including those with disabilities. This extended lifespan has resulted in individuals with developmental disabilities living with caregivers who are themselves 60 or older. There are ever more adults with various disabilities that may live separately from their families but still depend on their families for support, financial or otherwise.
When caregivers can no longer care for their children due to their own disability or death, the responsibility often falls on siblings, other family member, and/or the community. In many cases, expenses increase dramatically when care and guidance provided by parents must then be provided by a professional for a fee.
Careful planning by caregivers can make all the difference in the life of the child with a disability. Careful planning is also beneficial for other family members that may be left with the responsibility for caretaking (on top of their own jobs and caring for their own families and, possibly, ailing parents). A successful plan should include the following:
• A Letter of Intent - A letter of intent is a non-binding statement composed by a caregiver concerning their wishes, desires and needs of the person with special needs. A letter of intent includes a plan of care that carefully establishes where the child with special needs will live, who will be responsible for assisting the person with special needs with certain decision making, and who will monitor the person with special needs' care. The parent or caregiver of a person with special needs knows this person best. They can explain what helps, what hurts, what scares their child (who, of course, is an adult), and what reassures him. When the parents are gone, their knowledge will go with them unless they pass it on.
• A Special Needs Trust - In almost all cases where a parent will leave funds at death to a disabled child, this should be done in the form of a trust, typically called a "special needs" or "supplemental" trust. There are various forms of special needs trusts, however the main concept is that the person with special needs is the beneficiary of the trust. Consulting a qualified attorney when designing a special needs trust is crucial to effective planning. There are major decisions that need to be made in creating a trust including choosing a trustee. Most people do not have the expertise to manage a trust, even if they are family members, and so a professional trustee may be a wise choice. For those who may be uncomfortable with the idea of an outsider managing a loved one's affairs, it is possible to simultaneously appoint a trust "protector," who has the power to review accounts and to hire and fire trustees, and a trust "advisor," who instructs the trustee on the beneficiary's needs.
• Life insurance - Funding a special needs trust can be accomplished effectively through life insurance. What may look like a substantial sum to leave in trust today may run out after several years of paying for care that the caregiver had previously provided themselves. It is key to remember that the more financial resources available, the better the support that can be provided for the person with special needs. And if both parents are alive, the cost of "second-to-die" insurance--payable only when the second of the two parents passes away--can be surprisingly low.
If you are providing for a person with special needs, contact our office today so we can advise you on steps to take to protect and provide that party's care long after you are gone.
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