What is the best method for ensuring care of our diabled child if we pass away?
Full Question:
Answer:
I am prohibited from giving legal advice. Generally, the most important estate planning tool is a will. A will names the beneficiaries of your estate, names a personal representative to administer your will and makes provisions for minor or incapacitated children. A will may
contain provisions for personal protection of a disabled child. Depending on your wishes and your child's limitations, several options exist for this protection. The least restrictive alternative is to name an "advisor" for your child, who can provide guidance and suggestions in
personal and financial matters. The next alternative is to name an
"advocate." In addition to help in decision-making, an advocate may also
speak on behalf of the person, monitor services and may represent the
person's interests. Neither an adviser nor an advocate can legally
impose his or her wishes on the child. The most restrictive form of
personal protection is a "guardianship" because a guardian has legal
authority to make decisions for the child, such as where to live,
consent for medical care, etc.
Another estate planning tool that is often used for financial security
for a child is a trust. A trust names a trustee who manages property for
your child and pays the child's expenses or gives him or her money
according to guidelines specified in your trust. A "support trust" may
be instituted while you are still alive. The advantage of this type of
trust is that there will be no interruption in the financial support of
the disabled child while your estate is being probated. However, this
type of trust can also be set up in your will, which means it will not
go into effect until you are deceased.
A trust should be flexible to allow for future changes in both the needs
and abilities of your disabled child and the statutes and regulations
that may affect him or her. The trustee should be allowed discretion in
the use of the assets in the trust and income from those assets in
different ways at different times to meet your child's changing needs.
Another type of trust is the "special needs trust" or "supplemental
needs trust." This type of trust is used to preserve government benefits
a child receives, such as SSI or Medicaid (but not Social Security
Disability, which is not need-based). To qualify as a special needs
trust, the trust document must state that the principal and income are
to be used only to provide extra and supplemental care, maintenance,
support and education in addition to the benefits the child otherwise
receives as a result of his or her disability from any local, state or
federal government, or from private agencies. A special needs trust must
be carefully worded to prevent the state from claiming the assets in the
trust to pay for the cost of maintaining the disabled person.
