11/22/2010 @ 8:01:AM By Moynihan_Lyons
In this post we will cover two additional mistakes people can make in planning for family members with special needs.
Relying on siblings to use their money for the child with special needs’ benefit.Â Parents may be relying on their other children to provide for the special needs child from their own inheritances. This can be a temporary solution for a brief time such as during a brief incapacity if their other children are financially secure and have money to spare. However, it is not a solution that will protect the child with special needs after the parent/s dies or when siblings have their own expenses and financial priorities.
Here’s what can happen…
What if the inheriting sibling divorces or loses a lawsuit? His or her spouse (or a judgment creditor) may be entitled to half of it and will likely not care for the child with special needs. What if the sibling dies or becomes incapacitated while the child with special needs is still living? Will his or her heirs care for the child with special needs as thoughtfully and completely as the sibling did?
Siblings of a child with special needs often feel a great responsibility for that child and have felt so all of their lives. When parents are able to provide clear instructions and a helpful structure, they lessen the burden on all their children and support a loving and involved relationship among them.
Failing to protect the child with special needs from predators. An inheritance from parents who fund their child’s special needs trust by will rather than by a revocable living trust is in the public record. Predators are particularly attracted to vulnerable beneficiaries, such as the young and those with limited self-protective capacities. When you plan using a trust, rather than a will, the parent can decide who has access to the information about the child’s inheritance. This protects the special needs child and other family members, who may be serving as trustees, from predators.
In conclusion, planning for special needs beneficiaries requires particular care and the participation of the family’s entire “advisory team.” The estate planning and/or elder law attorney plays a pivotal role in ensuring the future well-being of a special needs child.
A properly drafted and funded Special Needs Trust can ensure that the beneficiary has sufficient assets to care for him or her, in a manner consistent with the parent’s wishes, throughout the beneficiary’s lifetime.