Intervivos: Planning for Children with Special Needs

Planning for Children with Special Needs

Last month I wrote about the exorbitant financial and tax penalties of Aretha Franklin’s estate because she failed to do estate planning. I also mentioned that Franklin had a son with special needs. One report mentioned that Franklin’s attorney had spoken with her multiple times suggesting that she do planning for herself and her son with special needs. Perhaps Franklin did not understand the importance of planning for her son, or maybe she thought she would get to it… eventually. We will never know. However, had she known more about the hardships he will face for lack of planning, it is reasonable to believe she would have planned accordingly. Here are some common pitfalls that can be prevented through proper planning for children with special needs.

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.

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 deaths 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 of the available options include guardianships, special needs trusts, ABLE accounts, or a combination of these options. Special needs planning is complex. There are many critical decisions that have a profound impact on your child’s life. Whatever your circumstance may be, I can help you plan for it.

Leave a Reply