Plan Now for a Future with Special Needs
The question on the mind of every parent of a child with a disability is: “Who is going to take care of my child if I’m not there?” To help ensure a safe, secure future for your child, it’s important to prepare. Here are five steps to get you started.
1. Write a letter of intent. This is the foundation on which the life care plan for your child’s future will be built. The letter of intent gives guidance to others who may provide care, support or other assistance for the person with a disability. It is a key part of effective future planning because it familiarizes other people with the person with special needs and expresses your expectations. You should begin writing your letter of intent today — no experts or lawyers are required.
2. Take a team approach. It is important that the family seek out advisors who embrace the team approach to planning to ensure proper coordination of all efforts. A recommendation is to begin with a special care planner (see note at end), a financial professional, an attorney, a certified public accountant and others, such as social workers and care givers, all working together.
Make sure the professionals you choose are qualified, experienced and involved in the area of special needs. Good sources of referrals are other parents who have already developed their plans and local support networks.
3. Consider the Supplemental Special Needs Trust (SSNT). As little as $2,000 in assets can disqualify an individual from many governmental programs. Assets in an SSNT, if properly drafted, do not count against this $2,000 limit, making it an effective vehicle to enhance the lifestyle of the person with special needs. Contrary to popular perception, you need not be wealthy to have a trust. There are many ways to fund trust accounts.
4. Coordinate your will and beneficiary arrangement. North Carolina’s intestacy laws dictate that a child will inherit a portion of the parent’s estate, which is usually enough to disqualify a child with special needs from receiving support from federal programs. It’s important for both parents to have wills, and for the wills to coordinate with other planning documents, such as the child’s trust. For example, the SSNT can accept the child’s share of the estate, thereby preserving the child’s eligibility for governmental programs. You should seek out an attorney that is familiar with SSNTs and your state’s intestacy laws.
5. Choose guardians, care givers and trustees. It’s very important to select the right people for these jobs and advise them of your selection. A great care giver (guardian) might be a terrible money manager (trustee) and vice versa. The co-trustee or “committee” approach is often used in difficult situations where the burden of care and/or oversight is too much for one person alone.
By beginning today and working with a team of advisors who collaborate closely on a family’s behalf, you can gain confidence that your child will be cared for in the manner that you intend.
Note: Special care planners receive advanced training in estate and tax planning, special needs trusts, government programs, and the emotional dynamics of working with people with disabilities and other special needs and their families.
Sean Godwin and Bill Weidner of The Piedmont Carolinas Group are special care planners with Massachusetts Mutual Life Insurance Company. They specialize in helping families with special needs children with life care planning and other financial needs.
This information is not written or intended as tax or legal advice and may not be relied on to avoid federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel.