If you have a special needs loved one and you want to make them an heir to your estate, you will need to become familiar with “special needs planning.”
What is Special Needs Planning?
Special needs planning is all about the wellbeing of your heir. With special needs planning, your estate can include ways to:
- Provide money management for your special needs child
- Protect your special needs child’s eligibility for government benefits
- Prepare a solution in case your child’s benefits should ever be cut off or decreased.
When creating your estate plan to include a special needs child, your best courses of action will depend on many factors, including:
- Is the special needs heir a minor or an adult?
- Will the special needs beneficiary be receiving special needs-based public benefits?
You Have a Special Needs Child, What Are Your Options?
There are several options for how to address leaving an inheritance to a special needs child or other loved one. As an estate planning law firm that is deeply concerned with the best interests of you and your family, we are here to help you understand the advantages and disadvantages of each option and how to move forward in the way that you desire. Some common solutions include:
- Disinherit your special needs child. While this is perhaps the least complicated option, it doesn’t fit into the goals of special needs estate planning – to provide optimal care and wellbeing to your special needs child after your death.
- Leave your estate to your other children. Depending on the relationship you have with your children and the relationship they have with each other, you might consider leaving your inheritance to your other children, with the understanding that they will use part of that inheritance to care for their special needs sibling. It’s important to note that this path doesn’t protect the assets intended to help your special needs child from creditors, divorced spouses, bankruptcies, or even just mismanagement on the part of your other children.
- Leave an inheritance to your special needs child. While this might seem desirable, remember that leaving an inheritance outright to a special needs child could require them to forfeit government benefits. If your child is receiving government benefits, then one key focus of special needs estate planning is making sure that the inheritance that passes to them upon your death will not be legally considered “available assets.” Why? Because too much monthly income, or too much cash, could put your child’s benefits at risk, as the Special Needs Alliance warns.
- Create a special needs trust. While this might seem complicated, it is generally the most recommended option for those wanting to ensure that their special needs child is cared for. And don’t stress about the complexity, you have a team of legal professionals ready to take that load off your shoulders with a simple trust planning process!
What Goes Into a Special Needs Trust?
Should you decide to create a special needs trust, we’re here to support you every step of the way. Creating a special needs trust will involve some key decisions, such as:
- Who should be the trustee? A trust needs a trustee! Choosing who you want to administer your trust can be a difficult decision, but we’re here to help if you have questions about the best choice.
- Should you create a living trust or a testamentary trust? A testamentary trust is one that goes into effect when you pass away. A living trust goes into effect upon its creation, while you as the estate owner are still living. Each choice has its pros and cons, but a living trust is often desirable for reasons including:
- Avoiding probate, allowing other family members to contribute, giving a co-trustee practical experience in administering the trust before your death.
- Should you create a revocable or irrevocable trust? There’s not a simple answer. It depends on your estate and what you want.
- Revocable trusts are usually the better fit for those who want more control over their trust and those who are not concerned with income tax.
- Irrevocable trusts might be more desirable if you have income tax considerations or concerns about federal estate taxes and gift taxes.
Ready To Get Started?
Whether you have a direction in mind, or you feel a little overwhelmed after hearing all this information, we’re here to help. Crafting an estate plan that is aligned with your wishes and the best interests of your loved ones can be tricky, but with extensive experience in Florida’s estate planning laws and cases similar to yours, the team at The Estate, Trust & Elder Law Firm, P.L is a choice you can trust! Contact our Fort Pierce office at 772-828-2588 or online.
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