Parents with children who are disabled and have "special needs" face unique challenges. You need to find the necessary care and services, foster the development of independent living skills, and protect your child from harm. While there are always current challenges, future challenges require special planning unique to your parenting responsibilities for your child with special needs.
Future planning must assure appropriate management of finances and personal decisions in the event of disability or death of both parents and to avoid future problems. Parents' responsibilities to a severely disabled child continue into the child's adulthood and must provide for future residential needs, and finding someone to care for the child when you are no longer able.
Your responsibilities require that you maximize financial resources for present and future expenses, which will allow the highest possible quality of life for the child and other family members. They also require that you identify and "train" someone to be able to care for your child, should you predecease him or her. This requires that you seek help from knowledgeable professionals, which includes attorneys and qualified financial planners.
The first step is for you to review your child's needs. You should gather detailed information about the nature, extent, and expected duration of the child's disability (or other "special needs"), as well as available financial resources and treatment, services, and benefits that are now or will become necessary.
Future planning requires you to apply for government benefits for your child. Generally, your child cannot have assets of more than $2000.00 to qualify for those benefits. This threshold contemplates that the child live in poverty with only their most basic needs paid for by the government. This antiquated thinking has since been addressed by the creation of "Special Needs Trusts".
There are two types of Special Needs Trusts. The first is created with assets of the disabled person. This is often the case when an award is made to the disabled individual or the individual is the beneficiary under another person's will. This is colloquially called a "Pay Back" Trust because any assets left over at the death of the beneficiary will be used to reimburse the government agencies that have advanced payments to the special needs child. If there are any assets left over after the government has been "paid back" they are paid to the remainder beneficiaries.
The second type of Special Needs Trust is one established by a third party, such as parents or grandparents. This trust is often "funded" by assets given to the trust during the lifetimes of the parents and grandparents (and any other family member or friend) and upon their deaths using cash, life insurance or any other assets. Any remaining assets at the time of the death of the beneficiary are distributed to designated persons listed in the trust agreement or will of the grantors.
The advantage of the Special Needs Trust is that assets far greater than the threshold $2000.00 are available to the trustee to be used for the "supplemental" needs of the child. This allows the child to live a lifestyle much more comfortable and rewarding to them. Examples of the kinds of services covered by the income and assets of the Special Needs Trust include but are not limited to: entertainment, such as attending concerts, ball games, traveling and vacations; payments to a nurse or other attendant to accompany your child while traveling; private transportation for these purposes; athletic training and similar services not covered by public programs; and special medical and dental care not covered by Medicaid.
An equally important consideration is that once the Special Needs Trust is drafted for your child, the rest of the family's own estate-planning documents must be reviewed. This review is required to be sure that your own or other members of the family's documents do not name the special needs child directly because upon your death the child would then have assets beyond the maximum threshold.
The drafting of these two types of Special Needs Trusts requires an attorney with unique and special knowledge in the area of Estate Planning. The government agencies charged with extending benefits to children with special needs will look to challenge these documents in the hope that if the child is declared to have assets beyond the maximum threshold the agency will not have to extend the benefits. They may also challenge the second type of Special Needs Trust in the hope of making it a "pay back" trust which would then require they be paid back for the benefits they have advanced.
My law practice is focused on assisting those families with children with special needs. I am available to assist you with a Special Needs Trust as well as Estate Planning for your family. Even if you already have a Special Needs Trust and Estate Planning documents, I am available to review them with you. Whatever your needs may be, let me help you create a peace of mind for your family's current and future needs.