In Part III of this Series, I want to discuss estate planning issues for parents of a special needs child.
A typical estate plan for parents without a special needs child includes:
- Financial Power Of Attorney;
- Health Care Power of Attorney;
- Advanced Health Care Directive; and
- Naming Beneficiaries of Retirement Plans.
In order to do everything possible to avoid giving money outright to the Special Needs Child, there are certain steps that can be taken:
1) Setting up a special trust for the Special Needs Child that will not be counted against the child's income for purposes of eligibility for government programs;
2) Redoing beneficiary designation notices on life insurance contracts and retirement plans; and
3) Telling family members to either leave money to a special needs trust for the child or specifically exclude the Special Needs Child from their Wills.
There are also specific arrangements that need to be made to ensure that your special needs child is cared for after your passing. This includes:
1) Arranging for a guardian to be named for the Special Needs Child;
2) Arranging for government services (SSI, SSDI, Medicaid, etc.); and
3) Arranging for living arrangements for the child.
Parents of special needs children always have a lot to deal with, but much of this planning should be done shortly after you find out that you have a child with special needs. Most importantly, life insurance planning should be done as soon as possible. If you wait too long, you may no longer qualify for insurance - and special needs parents, more than most, need to guarantee that money will be there after they pass.