Do you have a child with special needs? If yes, then you must read this!
I was with a client a few days ago (signing her estate planning documents) who brought in her two nieces and heirs to the signing meeting. It happens that one of the nieces has a special needs child — an autistic child. I always call people with special needs, children, even though they are already over the age of 18 and are considered, by law, adults. Why? because they are usually unable to provide for themselves, live on their own, and sometimes, they even need assistance with daily living activities.
As we reviewed the aunt’s documents, the niece sure had questions. She first told me how she could not leave any money to his autistic son (who is already 24) because if she did, her son would lose his disability and Medicaid benefits. She went further to say that she has named her daughter as the only beneficiary of her accounts and life insurance. I flipped. She noted, “I cannot leave anything to my son, so I am going to have my daughter provide for him.” I must add [out of her own free will]. My jaw just dropped and I wanted to scream. Nooo. I said: No!
She looked at me puzzled. What is that “no” all about? I could read in her query eyes.
I could not help it. I opened her aunt’s file and looked for a blank page and I went on to explain how a plan for her could totally benefit her son without affecting her special child’s governmental assistance.
The main points here:
- If you leave your disable’s child inheritance to a family member, you totally disinherited you disabled child and if you become incapacitated or you die, that child has nothing. You will no longer have control of the money left and your child will be at the mercy of the life circumstances of the family member.
- I am not saying the family member will not provide for the disabled child (there are some good-hearted and trusted people out there), but how is the family member going to protect that money to make sure the money is always available to protect that disabled child? Have you ever thought of the effect of a lawsuit against that good-hearted and trusted family member or the sudden need for a bankruptcy?
- Your child’s needs will be higher than the needs of other siblings. Can you risk leaving your child unprotected?
- Are you leaving a real estate property in someone else’s name? How can you stop that family member from selling the property if cash becomes short? If so, where will your special child end up living?
- Through the years, I have learned that people change and can be influenced by others. Can you assure that the good-hearted and trusted family member will never change?
- Have you ever seen that family member handle and increase his or her own money? Could that family member be able to do that for your special child?
- If one thing I can assure is that money can change people for the worse too easily. Even the best of people can fall for the temptation.
- I have seen grandparents pay off their mortgage with life insurance proceeds left to the grandkids. After all, they are providing a roof for the grandkids. But when the grandkids are ready for college, there is no money to afford it.
- I can go on and on and on. So, definitely, the Answer to leaving your disabled child’s inheritance to someone else with the hope that the person provides and cares for the disabled child’s needs is by far the worse idea I have heard in a while.
What is the solution? A Special Needs Trust!
Every family has different needs, but certainly, a special needs trust will make sure that the disabled child continues to qualify for governmental benefits and will be able to secure his inheritance for his own benefit. Yes, both can happen at the same time. There are restrictions on the special needs trust and the way the money can be used, but at the end, there are more benefits than restrictions. In addition, you can always control what happens to the property you leave your child as well as residence choices by the use of trust planning.
So, please do not voluntarily disinherit your child with the most needs. Leave it to your disabled child in the proper way!
If you have any questions or concerns, give us a call at 305-456-7158. We will be happy to set a time to talk about your specific needs and the solutions to those needs. There is no obligation.
Yahima Suarez, Esq.
Yahima Suarez, PA