Surprenant & Beneski, PC gives an overview of what you should know about financial planning for adults with special needs.

Financial Planning for Special Needs Adults: What You Need to Know

Estate planning for special needs adults can be somewhat challenging. You want to ensure that the adults have the income and resources they need without jeopardizing their eligibility for government benefits. A Massachusetts special needs planning attorney can assist families of special needs adults with financial planning to ensure their loved ones are protected now and in the future.

Estate Planning Considerations for Families of Special Needs Adults

Some of the unique challenges of financial planning and estate planning for families of special needs adults include:

  • Ensuring their loved one has a place to live;
  • Ensuring their loved one has someone to care for them;
  • Making sure that their loved one has sufficient income and resources to provide for his or her needs; and,
  • Ensuring government benefits continue without interruption or change.

Without careful planning, a family member could inadvertently cause a special needs adult to lose their eligibility for government benefits. This mistake could result in the special needs person losing their place to live, supervised care, or medical benefits. Working with an experienced estate planning lawyer can help avoid making errors and mistakes that could negatively impact your loved one’s quality of life and care after your death.

Four Important Things to Know About Financial Planning and Estate Planning for Special Needs Adults

1.  Set Up a Special Needs Trust

A special needs trust or SNT is a specialized trust used to hold assets for the benefit of a special needs adult. The funds in the SNT can be used to pay for goods and services not covered by government benefits. However, some disbursements from the SNT could be considered unearned income or in-kind support and maintenance. These disbursements could result in a reduction or loss of government benefits. Some disbursements are strictly prohibited. 

The family and trustee should work closely with an estate planning lawyer to ensure that the SNT is drafted correctly and that all parties understand how the funds from the special needs trust may be used to avoid problems.

2.  Avoid Direct Gifts and Inheritances from Family Members or Friends

It can be helpful to discuss financial planning for a special needs adult with family members and friends. If someone wants to provide money or property to assist in the care for the special needs adult, it is best to give or bequeath the assets directly to the special needs trust. The trustee can then use the money or property for the benefit of the adult without jeopardizing government benefits.

3.  Draft a Letter of Intent

A letter of intent gives the trustee and other caregivers important information about the special needs adult that cannot be found elsewhere in estate planning documents. A letter of intent may include information about attorneys, doctors, diet preferences, available services, healthcare concerns, income, government benefits, personal care, personal likes/dislikes, and other matters that directly impact the care and quality of life of the special needs adult. 

4.  Designate a Legal Guardian

In most cases, parents are the legal guardians of a special needs adult. However, if the parents pass away, another family member may need to assume legal guardianship. Parents should consider who would be a suitable person to make decisions for their child. 

Because the proposed guardian would need to petition the court to become legal guardian for the child, it is important to ensure that the person the parents choose agrees to assume this responsibility and understands the process of petitioning the court for legal guardianship after both parents pass away or are no longer able to care for the special needs adult.

Contact a Massachusetts Estate Planning Attorney For More Information 

Financial planning for a special needs adult can be complicated and challenging. There are many issues to consider, in addition to the four things discussed above. If you have questions or concerns about special needs planning, contact our office today to find out more.