Estate planning is an important aspect of a family plan for any parent and it takes on even greater significance for the parent of a special needs child.
A Will. Wills are important for a variety of reasons. They allow individuals to select beneficiaries and to establish the times at which beneficiaries receive the assets. Wills also name the fiduciaries who administer the estate and any trusts created under the will. Most importantly, they identify the person who will raise the child. A will ensures that assets are not placed in a child’s hands before the child is responsible enough to invest and use the assets prudently.
For the parent of a special needs child, a will is especially important. Leaving assets (through intestate succession – by state law where a person dies without a will -or through a will) outright to a special needs child can result in the disqualification of the child from receiving government assistance. With a properly structured will, assets allocated to a special needs child can be held in a trust which does not affect the child’s eligibility for these governmental benefits. A parent developing a plan must determine how to allocate assets among children taking into consideration the potential ability of each child to earn a living, the likely financial needs of each child, and the assets available.
Thought must also be given to who is best qualified to make financial decisions on behalf of a child. The trustee (and successors) should be someone whom the parent trusts implicitly, has some financial savvy and is sensitive to any unique needs of the beneficiaries.
In developing an estate plan, consideration must be given to the tax consequences of the plan. This is important so that the assets available to pass to a special needs child and other family members can be maximized.
Power of Attorney. A power of attorney allows an individual to appoint people to manage his or her assets and make investment decisions on his or her behalf. Having this document avoids the necessity of having to go to court to get someone appointed as a guardian if an individual cannot manage his or her own affairs. This document is important for all individuals, but especially for a special needs child who is capable of signing such a document.
Health Care Proxies. Health care proxies serve two purposes. First, this document asserts an individual’s desire to be free from the use of life-sustaining or prolonging procedures and medications if the individual becomes irreversibly or terminally ill. Second, the health care proxy can direct a health care agent appointed to make a wide range of medical and health care decisions, if the individual is unable to articulate his or her own preferences.
Again, this is an important document for all individuals, including a special needs child who is capable of appointing an individual to act on his or her behalf where appropriate.
Insurance. Insurance is an important asset used in connection with an estate plan. Insurance can be used to ensure that sufficient assets are available to provide adequate income to the surviving spouse, to provide for the lifetime care of the special needs child and to provide sufficient assets to care for any other children until they finish schooling and are able to earn a living. This is critical for a young family with a special needs child who will need sufficient assets to maintain his or her care over an extended period of time.
Estate planning is essential for any parent, but takes on additional significance for the parent of a child with special needs. In addressing the plan, a parent should make sure he or she is being counseled by an attorney with experience handling the sensitive issues accompanying a specials needs child.
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