Planning for the Future for Children with Special Needs
As a parent of a child with severe autism, I often have no idea what tomorrow will bring, much less what is going to happen years from now, when I am no longer here. My son’s behaviors are anxiety-provoking enough without me having to lie awake at night thinking about the future. But I do anyway. And I am not alone.
One thing we can do to ease the anxiety, and make sure our children are not only safe and secure, but can live the best lives possible after we are gone, is to prepare an estate plan that takes our children’s special needs into account. Usually this means we need to create a supplemental needs trust, also known as a special needs trust (SNT), for our loved one, in addition to a will. Any share of the parents’ estates that goes to their special child is held in the SNT.
An SNT allows you to leave money for the children with special needs but not cause them to lose important public benefits because they are over the asset limit -- money in the SNT is not considered to be owned by the child. Without an SNT, whatever you leave your child is likely to be eaten up by costs that otherwise would have been paid for by the state. The SNT also ensures that the money will be handled by someone who is capable of managing the money and making sure it is spent the right way.
How much money the parents need to leave to the special child is different in every case. If you don’t have what you think is enough, consider purchasing life insurance to fund the trust. A second-to-die (also known as a survivorship) policy usually works well in these situations and is less expensive than a regular life insurance policy. In my case my husband and I wrote a will that divides our estate evenly for our three children after we pass away, and then added extra money to my autistic son’s trust through a second-to-die life insurance policy that names only the SNT as the beneficiary, not the other two kids. That is just one way to handle it. A good insurance broker should be able to advise you about your options.
Choosing a trustee for the SNT is often the toughest part of this. A family member is best, if possible. (Sometimes, if there is a large amount of money in the trust, a family member is named as co-trustee along with a professional.) But who can do this? Who is likely to be around when both of you are gone? Generally parents name one of their siblings, and then name someone in next generation as the successor, such as one of their other children, or a niece or nephew. But not all of us are lucky enough to have people like that in our lives, in which case a professional is required.
It is imperative that anyone with children have a will, if only to name their children’s guardian after they are gone. It is even more important for parents who have children who may not be able to make a living, and will need family support. If you don’t have one, find an estate planner in your area who handles special needs, and give them a call!
Karen Mariscal, Attorney with Mariscal Special Needs Law and sister of Live On Goods partner, Laura Rao