Why You Need an Estate Plan for Family Members with Special Needs

In addition to a Special Needs Trust, a proper estate plan will also address the care giving, advocacy, living situation, and other issues that may arise for the child or individual with a disability. When an estate plan is put in place for a child or loved one, parents and family members often gain peace of mind. Creating and funding a Special Needs Trust can enhance and preserve the disabled person’s well being.

Designing an Estate Plan for children or siblings with disabilities can resolve several challenges:

How to keep public benefits while still leaving additional funds for the child
How to ensure the funds you leave in the Trust are well managed
How to limit the burden of care on your other children, and if necessary distribute that burden evenly
How to fairly distribute your estate between your other children and the disabled child
How to ensure enough money is left to meet the needs of your disabled child

Public benefits programs often do not provide adequate care for the disabled individual and must to be supplemented from other sources. More importantly, both public benefits programs and individual circumstances change over time. What’s working today may not work tomorrow. Other resources need to be available.

The Special Needs trust fulfills two main functions:

To manage funds for an individual who may not be able to do so herself/himself due to disability.
To preserve the beneficiary’s eligibility for public benefits- whether Medi-Cal, Supplemental Security Income (SSI), public housing, or another program.

What are Examples of Situations where a Special Needs Trust is Necessary?

Estate planning for a disabled child by parents. In this Situation, a Separate Trust does not need to be created. The Special Needs Trust can be what is called a “Sub-Trust” of the Parents’ Revocable Living Trust.
Inheritance or Settlement Funds. When one who is disabled comes in to an inheritance or lawsuit settlement, a Special Needs Trust may be necessary. Our firm has experience setting up Special Needs Trusts for both inheritance and settlement purposes.