Estate Planning Tips for Parents of Children with Disabilities

POST DATE: 1.6.23
Ccha  Estate Planning

Families with a child who has special needs face unique challenges. Their child often requires more help and resources to meet their needs and these needs often continue throughout their lifetime. Estate planning for a disabled child allows parents to create a financial plan to provide for your child after your death.

For over 140 years, the attorneys at Church Church Hittle + Antrim have provided clients with compassionate and professional estate planning. Our attorneys are here to help guide you through planning for your child’s future.

Tips for Estate Planning for Your Special Needs Child

Estate planning for parents of children with disabilities can be a complex and emotional process. Here are some things to consider as you plan for your child’s future:

  • Consider creating a special needs trust. A special needs trust allows you to set aside money or assets for your child without affecting their eligibility for government benefits. This type of trust can be used to pay for medical expenses, education, and other necessary items that government benefits may not cover.
  • Appoint a guardian. To prepare for times when you cannot care for your child, you should consider appointing a guardian who can make decisions on their behalf. Choosing a guardian can be difficult, but it’s crucial to pick someone you trust to do what is best for your child.
  • Consider life insurance. Life insurance can provide financial security for your child in the event of your unexpected death. Insurance proceeds can pay for your child’s housing, medical expenses, and other necessities. However, you will want to carefully consider how such a policy should fit into your estate plan and plan your beneficiary designations accordingly. You may consider naming a Special Needs Trust as your beneficiary, instead of your child.
  • Review and update your estate plan regularly. Your child’s needs may change over time, so it’s important to review and update your estate plan regularly to ensure that it reflects their current needs.
  • Seek legal and financial advice. Estate planning for a child with a disability can be complex, so it’s important to seek the advice of a qualified attorney and financial advisor. They can help you understand your options and ensure that your plan meets your goals and your child’s needs.
Estate Planning Tips

Why Does Estate Planning for Disabled Beneficiaries Matter?

A common goal of estate planning for a special needs child is to help the child retain eligibility for important government benefits such as Social Security and Medicaid. These programs are needs-based and eligibility may be impacted by the amount of income and assets your child receives. Your child could lose coverage if their financial resources suddenly increase through a gift or inheritance. Effective estate planning can help you avoid this issue.

Another benefit of estate planning is third-party management. If your child is unable to manage his or her own assets, it may be important to appoint a Trustee or Guardian who can do that for them in your absence. The Trustee will protect, manage, and distribute the trust assets for the benefit of your loved one, whereas a Guardian might have care and custody of your loved one.

The Special Needs Trust

When a parent, grandparent, or anyone other than the disabled individual funds a special needs trust, it is a “third-party” trust. If funding is from the disabled individual’s assets, it is a “self-settled” trust. It is important to consider which is the better option for the disabled individual. Depending on how the trust is funded and structured, it may allow a disabled individual to still inherit from a parent’s estate and simultaneously remain eligible for government benefits.

It’s important to consult with a qualified attorney or financial advisor to understand how the specific rules and requirements apply to your situation.

How Church Church Hittle + Antrim Can Help Your Family

If you have a disabled child, you likely put a lot of time, energy, and thought into caring for them and managing their disabilities. Estate planning for a disabled child is just one more step you can take to ensure that care continues after you’re gone. The estate planning attorneys at Church Church Hittle + Antrim have years of experience helping our clients safeguard their loved ones’ futures. We can help you fund a special needs trust and draft an effective trust document to manage the assets you want to leave your child. Our attorneys will provide the knowledgeable advice you need with the personal touch you deserve. Contact us today to schedule a consultation.