Families with special needs children must be careful while preparing estate plans. This is a requirement whether the special needs child is an adult or a minor. Furthermore, when a child is receiving or will be receiving needs-associated public benefits in the future, estate planning becomes even more vital. By seeking the help of a special needs planning attorney, parents can develop a well-defined estate plan, thus providing lifetime finance management for the special needs kid and making him/her eligible for public benefits based on the kid’s age, needs, competency, and other family factors.
Finding a Good Special Needs Lawyer
The first step is to pick a competent special needs planning lawyer to assist and guide the parents. The lawyer creates an SNT, or Special Needs Trust, for the child. Furthermore, the lawyer helps find the right life insurance provider for the child. An SNT consists of trustees who will receive money from the parents after they die. The trust assures the special needs child received the inheritance without impacting the public service eligibility.
Picking the Right Trustee Members
Picking the trustee members for the Special Needs Trust (SNT) is one of the challenging decisions that parents have to encounter. This is more important because choosing the right individuals will assure the long-term sustainability of the financial needs, love, and care of special needs children. Often trustees regard the funds in the SNT as their finance, which can give rise to dangerous situations for the welfare of the child. Thus, choosing an impartial a non-family member is a good idea.
Types of Special Needs Trust
Two types of SNTs are popular and are recommended by the special needs planning attorney as well.
Third-Party Trust
Third-party trusts don’t have to abide by federal rules and regulations. The trust is formed for special needs or disabled children by another party via a complementary transfer made during the death or lifetime of the donor. Parents established third-party trusts to help their kids acquire inheritances without affecting their vital public benefits. With third-party trusts, there are no concerns associated with age limitations, present Medicaid claims, or state agency payback clauses.
First-Party/Self-Settled Trust
The trust is established with the assets of a disabled or special needs person. Moreover, it is usually formed with a personal injury case settlement by an appointed guardian or caretaker appointed by an estate planner or the court. The trust has to abide by the laws and policies of federal law. First-party trusts are formed when a person suffers from traumatic injuries and, as a result, wins compensation in a court case.
Conclusion
Having a child with special needs or a disabled child brings a lot of challenges for parents and other family members. As such, proper estate planning is of utmost importance so that special needs kids can lead a respectful and healthy life after the death of their parents or sole caregivers. It is always recommended to hire a good special needs planning attorney so that the child can inherit the assets without disrupting eligibility for essential public benefits.
