| How to Provide for the Special Needs Child. | | | | experience as a minor will likely be different once |
| Life for the parent of a Special Needs child often | | | | the child has grown into adulthood. The trustee |
| involves interaction with medical, therapeutic, | | | | selected by the parent(s) will typically be an older |
| pharmaceutical and educational specialists. Most | | | | sibling, an aunt or uncle, or possibly a trusted and |
| parents learn to adapt and to balance their care | | | | long-time family friend whose interest in helping |
| and supervision of their Special Needs Child with | | | | the beneficiary is sincere. |
| the rest of their lives. As the child grows older, | | | | The trustee has an important job. So it's |
| the challenges faced by the parent change. | | | | imperative the right person be selected. If for |
| Fortunately, most people adapt and dealing with | | | | some unforeseen reason the person selected as |
| the challenges is eased by experience, knowing | | | | trustee cannot serve (due to their own death, |
| 'what works' for that particular child. | | | | disability, resignation, etc.), it's important to |
| Every parent of an autistic or otherwise | | | | pre-designate a second choice as trustee. The |
| physically, emotionally or mentally challenged child | | | | trust itself can also have a mechanism drafted |
| worries that when the parent is gone, the child | | | | into the trust architecture so an appropriate |
| may become a ward of the state, possibly | | | | trustee is always available to serve. The attorney |
| institutionalized or otherwise marginalized from | | | | can help guide you in determining the best way to |
| society and robbed of the opportunity for a safe | | | | do this. |
| and enjoyable life. That is why with help and | | | | Funding the Special Needs Trust. |
| thoughtful consideration, it's possible to create a | | | | Typically, if you leave an inheritance of any type |
| financial and legal safety net that protects the | | | | to a person who is receiving state disability |
| Special Needs Child, the family as a whole, and the | | | | benefits, this will disqualify the person from |
| flow of cash benefits paid by the state for the | | | | further benefits. However, the funding of the |
| disability. | | | | Special Needs Trust can be done so that this is |
| Planning in Advance is the Key. | | | | less of danger. |
| If planning is done incorrectly, it can cost the | | | | The most efficient and leveraged way to fund a |
| Special Needs Child the benefits he or she is | | | | Special Needs Trust is to use life insurance. Single |
| receiving from the state agency that pays the | | | | policies on an individual can be purchased to be |
| disability payment monthly. That's because an | | | | sure if the parent is a single parent. But in the |
| inheritance - received in the wrong way - can be | | | | case of a married couple, another option is |
| interpreted by state officials as 'disqualifying' the | | | | available. It's called 'second-to-die' coverage or |
| child from further benefits. That is why planning | | | | 'Survivorship' life insurance. |
| must be careful, precise and undertaken with | | | | In the case of a single policy (acquired on the life |
| care. | | | | of one person), the death benefits of the policy |
| The Special Needs Trust. | | | | are paid out at death. For a single parent, the |
| A trust executed by the parents of a Special | | | | owner and beneficiary of such a policy could be |
| Needs Child (whether a minor of an adult) needs | | | | the Special Needs Trust. In the event of the |
| to be different than that normally used in less | | | | parent's demise, the trust would receive the |
| complicated situations. The trust used in this case | | | | death benefit payout from the insurance carrier |
| will be what's called a 'Special Needs Trust'. This is | | | | and the trustee would receive the funds into the |
| different from the Living Trust you'll need for | | | | trust. In addition to insurance on the life of the |
| basic estate planning. | | | | parent, additional policies might be obtained on |
| The family's Living Trust will typically provide for | | | | aunts, uncles, grandparents, or siblings - payable to |
| any other siblings or grandchildren whereas the | | | | the Special Needs Trust in the event of their |
| Special Needs Trust will have the Special Needs | | | | death. |
| Child as its only beneficiary. A Special Needs Trust | | | | In the case of a married couple, the insurance |
| is typically irrevocable, so that it's 'outside the | | | | payout on a second-to-die or 'survivorship' policy |
| Taxable Estate' and may not be changed after | | | | would be made at the death of the last surviving |
| you're gone to suit the whims of those who | | | | spouse. This type of coverage can be surprisingly |
| remain. It typically is drafted so that the benefits | | | | less expensive than individual policies. That's |
| of the Trust do not replace or duplicate any | | | | because the risk to the insurance company is |
| disability income benefits paid by a government | | | | lower since it is not required to pay until the death |
| agency. It is easy for the unwary to trigger a | | | | of the survivor. At that time, the death benefit |
| disqualification of government benefits, so the | | | | payout would be made to the Special Needs |
| trust must be precisely drafted so the actions of | | | | Trust - which is both the owner and the |
| the trustee will not interfere with the state's | | | | beneficiary of the life insurance policy. |
| purpose and will not unintentionally cause the | | | | Properly established, a Special Needs Trust can |
| Special Needs Child to lose his or her benefits. The | | | | provides financial assets for your child's care and |
| Special Needs Trust should be drafted by a | | | | life enrichment are while still maintaining the child's |
| licensed attorney. | | | | eligibility for Supplemental Security Income |
| The document must prohibit the trustee (usually a | | | | benefits from the Social Security Administration, |
| trusted friend or family member) from taking any | | | | or from Medicaid and other programs. |
| action that would disqualify the beneficiary (your | | | | Other Considerations. |
| Special Needs Child) from receiving state benefits. | | | | Life enrichment activities and other items are |
| More specifically, it should be drafted to provide | | | | provided through the trust. But a supportive and |
| ONLY for those things that are not included in the | | | | nurturing environment can only be provided by |
| benefits paid by the state. So for example, if the | | | | people who care.If your child is legally a minor, it's |
| state benefits check that arrives is intended to | | | | important to ensure you name a Legal Guardian in |
| provide for food, shelter and clothing, the Special | | | | your Will who will be responsible to raise your child |
| Needs Trust cannot provide for those items. | | | | to adulthood. |
| How Does a Special Needs Trust Work? | | | | A Legal Guardian with appropriate powers of |
| Typically, the Special Needs Trust provides for 'life | | | | attorney is an important consideration and needs |
| enrichment' types of experience. For example, it | | | | to be taken into account. In some case, the Legal |
| might give the trustee the power to expend | | | | Guardian may need to continue serving as your |
| funds for music lessons, art lessons, movies, | | | | child's Guardian long after the child attains the age |
| recreation and sports activities, horseback riding | | | | of legal majority, so consider carefully who should |
| lessons, uninsured medical or dental expoenses, | | | | be your first, second or even third choice. |
| special dietary needs, a personal attendant, | | | | The time you take in planning a proper legal and |
| specially-equipped vehicles, maintenance on the | | | | financial 'safety net' for your Special Needs Child |
| vehicle, trips to destinations like Disney World, and | | | | will pay off immeasurably. You will know that |
| other activities, hobyy or recreational supplies , | | | | you've taken care of your child's future in a way |
| customized or specialized equipment such as | | | | that can provide them with an environment and a |
| computers, and almost any kind of experience | | | | lifestyle that gives the best opportunities they can |
| that can help enhance and enrich the quality of life | | | | have in life after you're gone. |
| for the Special Needs Child. These needs will | | | | © Copyright 2007 Michael L. Potter, Esq. All |
| change over time. | | | | rights reserved. |
| Those that the Special Needs Child might | | | | |