Legal and Financial Planning for Family Members With Special Needs
Planning for the future is always relevant to families, but it assumes a different importance when there is a special needs family member. Parents worry about providing financially for the long term, government assistance programs, and who will care for their family member when they are no longer capable of caring for them. Without prudent planning, well-intentioned decisions may put critical government benefits in jeopardy.
Why special needs planning is difficult
Beneficiaries of special needs may depend on public benefits such as SSI and Medicaid. These sources of benefits are limited by income and assets. Loss of benefits may result from inheritance of funds or gifts, leaving the special needs person without health benefits and essential services. Special needs planning is about improving the life of the person without threatening their benefits.
The role of special needs trusts
One of the most useful instruments of special needs planning is the special needs trust. Special needs trusts enable assets to be reserved on behalf of the person with special needs and still not be included under the benefit limit. The assets set aside in the trust may be used for the person’s living expenses, such as education, therapy, and recreation.
There are various kinds of special needs trusts, which can either be funded using a parent’s or family member’s resources or self-funded trusts. The kind of trust to use therefore relies on individual family situations.
Guardianship and decision-making
Another area of particular importance is decision-making authority. Parents might lose the automatic right to make healthcare or financial decisions for their child when he or she turns eighteen and becomes a legal adult. Guardianship could possibly be necessary, or a more limited arrangement, such as a power of attorney or supported decision-making arrangement.
Each choice has ramifications that will last in the long term, and it is essential to weigh the options to understand the level of assistance that is actually needed.
Coordinating estate plans with beneficiary designations
It is important to coordinate estate planning instruments to facilitate a special needs plan. These instruments may include wills, trusts, and beneficiaries of retirement plans and life insurance policies. It is wise to name a special needs trust rather than a person to avoid discrepancies within the overall plan.
Families should also let known relatives who may want to contribute financially to the planning know, so that gifts and inheritances can be planned for properly.
Planning for care beyond finances
Financial planning is just the beginning. It’s also important to consider future caretakers, housing options, and individual desires. Writing a letter of intent can help future caretakers by outlining family routines, medical needs, and individual values.
Talk to a Virginia Beach Trusts and Estates Lawyer Today
The Law Office of Angela N. Manz represents the interests of Virginia residents looking to set up a special needs trust for a loved one. Call our Virginia Beach estate planning lawyer today to schedule an appointment, and we can begin discussing your next steps right away.