10 Tips When Planning for Special Needs

When someone is disabled, they may qualify for the following programs to assist in the cost of their care:

• Medicare
• Social Security Disability Insurance
• Medicaid
• Supplemental Security Income

Although it is common to name a loved one as a beneficiary on financial accounts and life insurance policies, an inheritance left to a special needs individual can infringe upon any government assistance benefits they may be receiving.

It is important to take into account your loved one’s individual needs when leaving behind a legacy. Some beneficiaries may be self-sufficient while others may need additional financial and/or emotional support.

This is often times something individuals overlook and neglect to keep up to date. If your beneficiary is a minor or an individual who requires special care, naming a guardian is paramount to ensuring their well-being.

A special needs trust (SNT) offers a way to transfer assets to beneficiaries with disabilities without affecting their eligibility to collect public benefits. Naming a SNT as a beneficiary on a life insurance contract will ensure public benefits aren’t jeopardized and the death benefit is used for their care.

A trustee assumes fiduciary responsibility for managing and distributing assets in a trust for the benefit of the trust beneficiaries. When naming a trustee it is important to consider:

• Their relationship to the trust beneficiaries
• Their ability to manage the trust
• Are multiple trustees required?
• Do you have a successor trustee?

A letter of intent can be your opportunity to make your legacy more personal. It can also be vitally important for a caregiver or trustee, as it will provide important information concerning daily activities, likes and dislikes and any other crucial information concerning a child with special needs.

It is important to have a plan in place if you were to become temporarily or permanently incapacitated. Providing a loved one with financial power of attorney will allow them to make discretionary, non-support distributions for the benefit of the beneficiary with special needs.

You may have family members who wish to name your child as a beneficiary of their estate. It is important to have effective communication letting them know any assets left to this child should be directed to a special needs trust.

Depending on your loved one’s capacity, basic documents such as a will, power of attorney, healthcare directives, and HIPAA release forms could be advisable. In addition, placing the beneficiaries own assets in a trust could be beneficial when managing and distributing their estate.