Attorney Garrett T. Smith

By Attorney Garrett T. Smith

Estate planning is an important step to avoid probate and eliminate certain tax liabilities. When you have a child with special needs, it is important to understand how your plan may impact government benefits. There are additional considerations that should be included in your plan to preserve long term benefits and ensure that your child with special needs is taken care of. Here are some common mistakes to avoid.

Not Planning Around Benefits. The government has specific rules regarding benefits and often discontinues benefits due to an inheritance. Even though the inheritance provides for the child financially, they could lose their medical benefits and incur expensive medical costs that will quickly deplete the inheritance. Once the inheritance is depleted, the child will have to reapply for benefits and will not have the financial support they need during the gap period between the inheritance and benefits.

Disinheriting Your Child. In attempting to maintain government benefits, parents will disinherit their child so the child can continue receiving benefits. Doing so denies the child critical resources that can be used to make their lives better. There are better solutions to allow you to provide an inheritance AND protect your child’s benefits.

Not Putting It in Writing. If it is not in writing, it is not binding. Additionally, there is the “Lost in Translation” phenomenon where what you wanted and what the listener perceived are two different things. It is always best to put your wishes in writing and make them part of the legal documents for your child with special needs.

Relying on Your Other Children. Circumstances change. Marriages, divorces, and death can dramatically alter the care that siblings will give to their brother or sister with special needs. Over time, siblings can have a change of heart about caring for them. We always recommend that you put provisions in your plan to specifically provide for your child with special needs.

Waiting Too Long. Waiting too long after your child turns 18 to set up a guardianship for them can cause undue hardships for the child and have very costly repercussions.

Failing to Provide Privacy. Individual privacy is important for your child. You want to protect your child’s information from getting into the wrong hands.

There are many ways to plan for a child with special needs. Some options include guardianships, special needs trusts, ABLE accounts, or a combination of these tools. Special needs planning is complex. There are many critical decisions that have a profound impact on your child’s life.

If you have any questions about your current plan or would like to set up a plan for you child with special needs, please give me a call!

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