Special needs estate planning focuses on providing for the special needs of our loved ones with disabilities when we are no longer there to organize and advocate on their behalf. Parents of children with special needs must make careful estate planning choices to coordinate all of the legal, financial, and special care needs of their children – both now and in the future.
An Overview of Special Needs Estate Planning
There are several types of trusts to assist with these special planning challenges. The most common types are support trusts and special needs trusts.
- Support Trusts: Support trusts require the trustee to make distributions for the child’s support in areas like food, shelter, clothing, medical care, and educational services. Beneficiaries of support trusts are not eligible to receive financial assistance through Supplemental Security Income (SSI) or Medicaid. If your child requires SSI or Medicaid, you should avoid a Support Trust.
- Special Needs Trusts: For many parents, a special needs trust is the most effective way to help their child with a disability. A special needs trust manages resources while also maintaining the child’s eligibility for public assistance benefits.
There are two types of special needs trusts:
- Third-Party Special Needs Trust: Created using the assets of the parent(s) as part of an estate plan and distributed by a will or living trust.
- Self-Settled Special Needs Trust: Generally created by a parent, grandparent, or legal guardian using the child’s assets to fund the trust (e.g., when the child receives a settlement from a personal injury lawsuit and will require lifelong care). If assets remain in the trust after the child’s death, a payback to the state is required, but only to the extent the child receives public assistance benefits.
Special Needs Trusts are a critical component of your estate planning if you have loved ones with disabilities for whom you wish to provide after your passing. Generally, special needs trusts are stand-alone trusts funded with separate assets (like life insurance), or they can be sub-trusts in existing living trusts.
Persons with special needs, either physically challenged or mentally challenged (Mentally III), have the following characteristics:
- Physical Disability: Muscular Dystrophy, Multiple Sclerosis, Epilepsy, Leukemia, Quadriplegic, etc.
- Developmental Disabilities: Down Syndrome, Autism, Cerebral Palsy, Spinal Bifida, Intellectual Disability, etc.
- Behavioral & Emotional Disabilities: Attention Deficit Disorder (ADD), Bipolar, Post Traumatic Stress Disorder (PTSD), Obsessive Compulsive Disorder (OCD).
- Sensory Impaired: Blind, Visual Impaired, Deaf.
Special Needs Estate Planning Online Resource Center
Planning for your loved one with special needs requires extensive research to become a well-educated advocate. Look to the latest medical, educational, financial, and legal changes to stay updated. The Estate Planning & Elder Law Center of Brevard assists you and your family in addressing your unique concerns. We hope this special needs resource center provides you with a quick reference to find the additional resources you may need.
- Social Security Resources:
Benefits for Children with Special Needs
Social Security Benefits Eligibility Screening Tool
- Handbook for Trustees: A special needs trust can be a very powerful aid in managing care for a family member with a disability. It can provide supplemental items like therapy, respite care, dental work, companions, entertainment, and education — all without interfering with the beneficiary’s SSI, Medicaid, or other government programs. The special needs trust can be a flexible tool. It can also be very difficult and confusing to administer.
- Exceptional Parent online: Online resource for the special needs community, including families, caregivers, physicians, allied health care professionals, and teachers.
- The Arc: The Arc is a national organization of and for people with mental disabilities and related developmental disabilities and their families. The Arc works to promote and improve support and services for people with mental disabilities and their families and also fosters research into and education about the prevention of these disabilities in infants and young children.
- National Academy of Elder Law Attorneys: The National Academy of Elder Law Attorneys is a non-profit association that assists lawyers, bar organizations, and others who work with older clients and their families. The Academy provides information, education, networking, and assistance to those who deal with the many specialized issues involved with legal services to the elderly and people with special needs.
- National Alliance on Mental Illness: The National Alliance on Mental Illness (NAMI) is dedicated to improving the lives of persons living with serious mental illness and their families. There are NAMI organizations in every state and over 1,100 local communities across the country.
- Center for Parent Information and Resources: The Center for Parent Information and Resources (CPIR) serves as a central resource of information and products to the community of Parent Training Information (PTI) Centers and the Community Parent Resource Centers (CPRCs), so that they can focus their efforts on serving families of children with disabilities. Use this interactive mapto find the PTI or CPRC that serves your state or territory.
- Annual Disability Statistics Compendium: This publication, the first compendium, focuses on state-level statistics published by federal agencies.
Calculating Your Loved One’s Future Financial Needs
This free online calculator can help you project the future expenses of an individual with special needs. You’ll need to sign up and create a user profile: