Estate planning is essential for every family, but especially for families with members who have special needs. When a caretaker passes away, there must be a plan in place that provides for the continued care of a special needs individual. Unfortunately, individuals who fail to consult a Massachusetts special needs planning attorney can make devastating mistakes that leave their loved ones without the funds and resources needed for their care.
Five Common Special Needs Estate Planning Mistakes
1. Failing to have any plan at all.
Failing to have a written estate plan is one of the biggest mistakes a person can make when caring for an individual with special needs. Upon the caregiver’s death, the special needs individual may inherit all or a substantial portion of the person’s estate through Massachusetts’ intestate law. The inheritance could result in the person losing government benefits because of restrictions on asset ownership.
2. Using a DIY estate plan.
A DIY estate plan might be sufficient for an individual who has very little assets, no children and is not married. However, it is not sufficient for special needs estate planning. DIY estate plans do not address complicated issues, such as special needs planning. Furthermore, some of the estate documents downloaded from the internet may not be valid in Massachusetts, or the person may not execute the documents properly. In either case, the result could be even worse than having no estate plan.
3. Using a regular trust agreement.
Most families provide for a loved one with special needs by creating a trust for that individual. The trust receives the inheritance instead of the individual. The trustee then uses the trust assets for the benefit and care of the special needs individual. However, a Special Needs Trust differs in many ways from other trust agreements. If a Special Needs Trust is not used, the individual could lose government benefits because the person has direct access to the inheritance.
4. Failing to update beneficiary designations.
Some property passes directly to beneficiaries outside of a person’s estate, such as life insurance proceeds, retirement accounts, and some financial accounts. Beneficiary designations should name the Special Needs Trust as the designated beneficiary to protect access to government aid. Failing to take the additional step of changing beneficiary designations is a common mistake many people make when they do not consult an experienced estate planning lawyer.
5. Accidently disinheriting a person with special needs.
The same problem arises with an estate as it does with beneficiary designations if a person is not careful. Many parents do not fund a Special Needs Trust while they are living. The trust is funded after the parent’s death from their estate. However, if the parent’s will does not include the correct language to transfer a child’s inheritance to a Special Needs Trust, they could accidentally disinherit their child.
Contact a Massachusetts Estate-Planning Attorney for Help
Special needs planning can be complicated and overwhelming. You want to ensure that your child or loved one has the resources to pay for quality care after your death without accidentally cutting off government benefits. Contact our office today to learn more about special needs planning from a Massachusetts estate-planning attorney. Our attorneys can discuss options, make suggestions, and help create an estate plan that provides for your loved one with special needs long after you are no longer to care for him or her yourself.