Special Needs Planning

Saturday, September 22, 2012 was the 50th anniversary of a landmark article written by Eunice Kennedy Shriver in the Saturday Evening Post.  The article was catalyst for change and ignited a revolution in the way we treat people with intellectual disabilities.  You can watch Maria Shriver’s wonderful tribute to her mother here: http://www.youtube.com/watch?v=e4bI6Vcebh0.   In recognition of this anniversary I thought I would share some thoughts on planning for those with special needs.Special needs planning is not "poverty planning" as some may believe.  It is unnecessary to disinherit a special needs person in order that they can receive needs based assistance.  However, planning that is not designed with the person's special needs in mind may render that person ineligible for essential government benefits.  Giving assets to your other children and relying on them to provide for a child with special needs is also not a solution that will protect the special needs child.  If the inheriting sibling divorces or loses a lawsuit, they may lose all or a portion of that inheritance. Further problems can arise if this sibling dies or becomes incapacitated while the child with special needs is still living. Siblings of a child with special needs often feel a great responsibility for that child. Providing clear instructions and a helpful structure, lessens the burden and supports a loving and involved relationship.A Special Needs Trust is a Trust designed to receive and manage assets for a person with a disability, while maintaining eligibility for governmental benefits.  The Trustee has full control and discretion over distributions.  The distributions from the Trust are meant to “supplement” government benefits and provide for “special needs” that enhance quality of life.  “Special needs” can include medical and dental expenses, annual check-ups, desirable equipment (such as, a specially equipped van), training and education, insurance, transportation, and essential dietary needs. It may also include spending money, electronic equipment, computers, vacations, movies, payments for a companion, and other quality-of-life enhancing expenses.  Life insurance on the life of a parent is often used to fund these trusts.   A key benefit of a Special Needs Trust is that family and friends can make gifts to the Trust.  These family members and friends can name the Special Needs Trust as the beneficiary of their own assets in their Trust or Will, and they can also name the Special Needs Trust as a beneficiary of life insurance or retirement benefits.It is important to plan for a beneficiary with special needs. Unlike other beneficiaries, a person with special needs may never be able to compensate for a failure to plan.