Parents of children with special needs face a wide range of challenges, including ensuring their child’s educational and medical needs are met. Taking time to engage in estate planning for a disabled child is another important aspect of parenting a special needs child. Creating an estate plan will enrich and enhance your child’s life now and in the future.
Create an Estate Plan for Your Disabled Child
Creating an estate plan for a disabled child can help you find a sense of peace, knowing that your child will be taken care of after you pass away. The estate planning attorneys at Surprenant, Beneski & Nunes, P.C. , have helped many Massachusetts residents create special needs trusts. Attorney Daniel Surprenant is a member of the Special Needs Alliance, a national organization of attorneys dedicated to special needs planning. His experience in this field allows our firm to provide informed and compassionate guidance to families navigating these complex legal matters.
Protecting Your Child’s Public Benefits With a Special Needs Trust
Using a special needs trust is one of the most effective ways to ensure your disabled child remains eligible for public benefits while benefiting from your assets. Children with special needs often rely on public benefits such as Social Security and MassHealth for income and health insurance. However, these programs have strict income and asset limits, and transferring assets directly to your child through a will could disqualify them from receiving these essential services.
A special needs trust allows you to protect your child’s eligibility for these benefits while providing additional financial support. When you establish a special needs trust, you transfer ownership of certain assets to the trust. A trustee then manages these assets and controls how and when income is distributed to your child. As long as the trust funds are not used for primary care covered by public benefits like Social Security, Medicare, or MassHealth, your child will remain eligible.
The benefits of a Special Needs Trust include:
- Financial support for uninsured medical treatments or therapies
- Access to higher-quality care facilities
- Coverage for additional expenses such as travel, food, and education
You can establish a special needs trust in two ways, depending on your preferences and financial situation:
- Living Trust: Created during your lifetime, this trust allows you to protect your assets immediately. It’s an excellent option if you own significant assets or want to avoid probate and estate taxes.
- Testamentary Trust: Established through your will, this trust is created after your death. It ensures that your child’s financial needs are addressed according to your estate plan.
Both options provide valuable ways to secure your child’s future while preserving their eligibility for public benefits.
Establish a Guardianship or Conservatorship
Establishing a guardianship or conservatorship is essential in estate planning for a disabled child. If your child is a minor, you can use your last will and testament to appoint a guardian to care for your child. However, if your child is 18 or over, you’ll need a court-appointed guardianship or conservatorship to care for your child.
Parents can establish guardianship and appoint themselves as the initial guardians. Then, they appoint a successor guardian, whom they trust to take over the guardianship when they pass away. In most cases, the guardian will have access to the assets in the special needs trust and will be responsible for distributing those assets to your child according to the terms of the trust agreement.
Direct Your Non-Probate Assets
The probate process can be expensive and complicated. If you have a child with a disability, it’s important that your child can access your estate quickly after you pass away. An estate planning attorney can help your child avoid going through the probate process to access funds. Certain assets are designated to transfer automatically to your beneficiaries when you pass away. When it comes to the following assets, all you need to do is make sure that you’re child is listed as the beneficiary in the account documentation:
- Bank and brokerage accounts with a Transfer on Death (TOD)
- Life insurance policies
- Retirement accounts (IRA, 401(k), etc.)
- Property held as joint tenants or tenants by the entirety
- Trusts
There is usually a simple form that you can submit to the corresponding financial institution to change the beneficiary designation. Many estate planning attorneys will advise gifting retirement assets to a person other than your disabled child to avoid the special needs trust having to pay income and capital gains taxes, which can be a considerable charge. It’s usually advisable to fund special needs trusts with bank accounts, brokerage accounts, and life insurance policies.
Other Ways to Provide for a Disabled Child
In addition to a special needs trust, there are other essential legal documents that should be part of a comprehensive estate plan for a disabled child. These documents ensure your child is cared for according to your wishes if you become incapacitated or pass away.
Durable Power of Attorney
This document allows you to appoint an agent to manage your financial and legal affairs if you are unable to do so. Key benefits of a durable power of attorney include:
- Ensures your agent can use your assets to assist your child with special needs.
- Grants authority to create and fund a trust for your child, as needed.
Letter of Intent
A letter of intent provides clear instructions for how your child should be cared for after your death. A well-drafted letter of intent:
- Offers guidance on day-to-day activities, needs, and preferences.
- Includes details about your child’s likes, dislikes, and other vital information to help a trustee or caregiver provide proper care.
By including these documents in your estate plan, you can ensure continuity of care and financial security for your child with special needs.
Reach Out to a Southeastern Massachusetts Estate Planning Attorney
The attorneys at Surprenant, Beneski & Nunes, P.C. , recognize that the thought of estate planning can be overwhelming for parents who are already busy parenting a child with special needs. Our empathetic attorneys can help you walk through the estate planning process. Contact Surprenant, Beneski & Nunes, P.C. , today to learn more about estate planning for a disabled child in Southeastern Massachusetts.