Many children with special needs rely on public funding for their support, like Medicaid for health insurance and Supplemental Security Income (SSI) for monthly income. If your estate plan is not set up correctly, your child could lose eligibility for these programs when he or she needs them the most. Whether your child with special needs is a minor or an adult, you will need to address unique issues when making your estate plan.
A California estate planning attorney can help you avoid pitfalls when creating your estate plan. Parents with special needs children typically have these three goals when planning for the future of their children:
- To avoid outcomes that could jeopardize your child’s eligibility for government benefits programs. For example, the assets or income you provide for your child need to be in a category that the government does not consider as “countable” assets for purposes of qualifying for Medicaid, SSI, and other benefits.
- To make assets available to help your child if the public funding programs get canceled or reduced.
- To plan for the management of your child’s money. You need to select someone who will manage your child’s financial matters if you become incapacitated and after you pass away. Choosing the right person to assist with your child’s finances may be one of the most critical decisions you will have to make for your child’s future well-being.
Special Needs Trusts
A thoughtfully-drafted Special Needs Trust can help provide disabled beneficiaries with the support they require, without causing them to forfeit their public benefits during their lifetime. After the beneficiary of a Special Needs Trust passes away, the government may have the right to claim the assets that remain in the trust as reimbursement for benefits and services received during his or her lifetime. But any funds remaining after that reimbursement can go to the other beneficiaries you name in the trust.Special Needs Trusts can be tricky to set up. If not done correctly, your child will not receive the financial security you wanted him or her to have. Contact us today for a consultation. Our California estate planning attorneys can draft the trust documents and guide you through the process of transferring assets to the trust.