Estate Planning for Parents of a Special-Needs Child

Things can change in the blink of an eye. A healthy pregnancy turns into a difficult delivery, resulting in developmental disabilities. Your child’s accident leaves him with a traumatic brain injury, rendering him unable to manage independently. How can you plan for your child’s future when there are so many immediate problems to contend with? How can you make sure your grown child will be cared for properly after you are gone?

The best plans are made when there is no emergency, while you have the time and energy to think clearly and thoroughly. Planning gives everyone peace of mind: you, your friends, your family and your child. Planning lets you make the right choices for your family.

Initial Planning and Documents

A proper legal plan will address your child’s needs now and in the future. That plan includes legal documents, which a special needs planning attorney can draft. Those documents include Power of Attorney, Health Care Proxy, Last Will and Testament, and Trusts.

Basic planning will allow you to:

1. Take care of yourself: You must have a comprehensive power of attorney and health care proxy to take care of you, in the event you cannot take care of yourself. A Power of Attorney allows someone you designate to manage your finances and make sure important bills are paid and your family’s financial needs are met. This is incredibly important if your child is financially dependent upon you;
2. Take care of your minor children: You must have a designation of stand-by guardians to take care of your minor children if you are unable to. This will allow a trusted person to immediately intervene and care for your child.
3. Create a Soft Landing: You must execute a Last Will and Testament that, on your death, directs where your assets go and creates a testamentary special needs trust to provide for your child financially. Third-party special needs trusts can help maintain your child’s eligibility for Medicaid and Supplemental Security Income (SSI) and protect her from exploitation. Additionally, you should consider establishing a free-standing third-party special needs trust. Having this trust funded will allow the trustee to use trust assets to take care of your child without the delay of a probate proceeding.

Guardianship

While your child is under 18, you are his natural guardian. A natural guardian is allowed to make health care and limited property decisions for a minor.

Once your child turns 18, you are no longer his guardian and he is presumed able to make his own decisions, even if he has a disabling condition.

By your child’s 16th birthday, meet with your special needs planning attorney again. The purpose of this meeting is to lay the ground work for adult guardianship. Your attorney will tell you the information and documentation you should begin assembling for a guardianship petition. By your child’s 17th birthday, you should meet with your attorney once again to begin the guardianship process. In New York there are two types of adult guardianship; your attorney will assist you in determining which guardianship is appropriate for your child. Beginning this process 10 to 12 months in advance of your child’s 18th birthday should provide ample time for the appointment of a guardian.

Myths

There are many myths surrounding how parents should protect the interests of a special needs child.

Myth 1: I don’t need to create a special needs trust; I can just leave the money to my other child.

Truth: Your other child may be a wonderful person, but if you leave the money to her, it unconditionally belongs to that child. If that child gets sued, her creditors can reach the money. When that child dies, the money goes according to her Will or the law of intestacy; possibly leaving your other child with no safety net.

Myth 2: I don’t need to become guardian; my other kids can do that when I die.

Truth: A guardianship brought by a parent is much easier and quicker than one brought by adult siblings later. Right now, you know the location of all the needed diagnostic records. Right now, you know the identity of the doctors who will be able to certify your child’s disability for the Court. Fifty years from now, those records will be much harder to find.

Myth 3: I don’t need a will; my spouse will inherit everything and she/he can take care of it then.

Truth: If you do not have a Will, New York’s intestacy law directs some assets to the spouse and some to the children. There is no guarantee that your spouse will later sign or be able to sign a Will. If you and your spouse die in a common disaster and there is no Will, your child will inherit assets outright. Inheriting assets can cause your child to lose important benefits.

Myth 4: Having a will complicates things.

Truth: Most estate plans are straightforward. After your death the nominated executor can hire an attorney to assist him in having the Will admitted to probate and in administering your estate. Having a Will allows you to direct where and how your money is distributed after your death. If you don’t have a Will the law controls where and how your money is distributed. Not having a will makes your estate complicated and puts your family and assets at risk.

Myth 5: Lawyers are scary and planning is hard.

Truth: Most lawyers are not all that scary. If your lawyer is scary, you need to find another lawyer, one that treats you and your family with respect. Working with an experienced special needs planning attorney is not hard. The attorney will tell you what information she needs from you, answer your questions and explain the planning process.  She will discuss your concerns and your goals, and will create a plan that helps you to meet those goals.