What are the particulars of long-term planning for children with special needs?
Regardless of family income level, parents with special needs children have to think seriously about how the long-term requirements of their children will be met after their parents pass away. This is by no means an uncommon problem. One in five Americans has a disability and, according to the National Disability Institute, 20 million families have at least one family member who is disabled. The lifetime costs for caring for individuals with disabilities can be staggering. Disabilities like spina bifida, cerebral palsy, severe mental impairment, and autism can cost more than $2 million over the course of a lifetime. It is essential that parents consult with an experienced special needs estate planning attorney in order to prepare for the future of their special needs child.
Government Benefit Programs
While programs like Medicare, Medicaid, and Social Security can provide a significant safety net for medical care and living expenses, these government agencies have complicated qualification rules depending on whether the disability is the result of a birth defect or an illness or injury that occurred later in childhood. It is crucial that parents understand government regulations concerning assets of disabled persons and how such assets affect benefits so they can make sure that their plans to assist their child do not end up interfering with his or her ability to collect government assistance.
Depending on circumstances, such as whether the disabled child has ever been able to work, the age of the parents (benefits for the child may increase when a parent reaches retirement age), and the death of a parent (at which point the child's benefits may increase), the amount of benefits received may vary. It is important to remember that government benefits, whether they take the form of Social Security Insurance (SSI) or Social Security Disability (SSD) do not normally provide enough money for a disabled person to live independently.
Creation of a Special Needs Trust
By creating a special needs trust for their special needs child, parents can protect the child's ongoing benefits. It is generally recommended that the way the money in such trusts is invested be conservative, should the market take a nosedive, leaving a higher than usual level of cash available for emergencies. It is also important that clients continue to fund the trust while they are still working and their income is higher. The special needs trust, prepared by a competent estate planning attorney, will leave the assets they bequeath to their special needs child to be distributed in such a way that it does not interfere with the cash benefits and medical protection the government offers.
The Importance of Sharing Information
The last thing you want when you engage in estate planning is to leave confusion or resentment behind when you die. This is why it is necessary to share the details of your estate plans with family members, heirs, and, most particularly, those who will have an active role in implementing your wishes when the time comes, such as your executor and/or the guardian of your special needs child.