Estate planning can be a confusing process but when you have a special needs relative to consider it can make the process even more confusing. It’s always recommended that you work directly with an attorney for this reason. Finding the right attorney can sometimes take work though, so today we’re sharing a few tips to help you to get started.
7 Special Needs Estate Planning Tips
1. Letter of Intent
If you have a family member with special needs a letter of intent is absolutely crucial. This is a letter that is directed towards guardians, trustees, advocates, and anyone else involved in the care of your special needs family member. It includes important information about the functional abilities, routines, interests, etc. of the special needs family member. While this isn’t actually a legal document, it is an important one and should be kept alongside your estate planning documents. It’s also important to remember to update this letter as your loved one grows.
2. The Special Needs Trust
A special needs trust is another important part of necessary planning when you have a special needs family member. A special needs trust may also be referred to as a “Supplemental Needs Trust” and it is a trust that allows members of the family to contribute funds for the needs of the beneficiary. One of the biggest benefits to the SNT is that it gives the beneficiary access to additional funds without affecting their eligibility for government assistance.
Setting up a special needs trust is something that must be done properly and take into consideration all of the current laws and financial programs that may affect the trust. The best way to ensure that your special needs trust is set up properly is to consult with a reputable and experienced attorney as well as an accountant or financial manager.
3. Future Arrangements
The letter of intent outlines much of your care plan for your special needs relative, but it’s also helpful to create a plan for future arrangements as well. More specifically, a plan that assists trustees and family members in understanding how trust assets and special needs benefits should be used to take care of your loved one. This plan should be incorporated into the special needs trust.
4. Do The Math
It’s also important, when planning for your loved one with special needs, that you plan out details in a way that provide for your loved one over their lifespan. The biggest concern here is planning ahead to be sure that your loved one will have the funds and resources that they need in order to survive after your passing.
It is of utmost importance that you fund the special needs trust fully and base the projected need for that trust on your loved one’s current state of need as well as projected future needs.
When it comes to setting up and managing special needs trusts, it’s always best to confer with an attorney as well as an accountant who is familiar with trusts and estate planning for those with special needs. These two members of your “team” will help you to make the most comprehensive financial care plan while taking into consideration any legal obstacles that may pertain to your situation.
5. Appoint Specific Caregivers
When considering a special needs relative it’s necessary to appoint trustees and caregivers who have the understanding and famliarity needed to assist your loved one. This means being as specific as possible in your final estate plan. This also means doing everything possible to avoid court interference in the needs of your loved one. Not only will court appointed guardians and trustees be unfamiliar with your particular wishes, they will also be inexperienced with your loved one’s needs specific to them. This will only serve to create mass turmoil for everyone involved – specifically your special needs family member. So, be as specific as possible for every aspect of your estate plan and keep those specificsupdated as time goes on.
We should note here that while courts will always do what is in the best interest of a child or special needs individual, familiarity creates less of a disruption to routine and offers greater comfort to the indivdual with special needs.
6. Appointing Trustees
As we have discussed many times before, a trustee is someone who manages the assets in a trust for someone who is unable to manage those assets for themselves. For example, a sibling of a child with special needs may be appointed as the trustee of their special needs sibling because they are familiar with the specific needs of their sibling and can be trusted to utilize trust funds responsibly for their care.
When appointing a trustee there are a few important considerations to take into account. Yes, you want a trustee who is understanding and familiar with your loved one’s needs, but it’s not just about managing money or familiarity.
- You want to select a trustee who is financially savvy or who at least has access to professional resources who can guide them in their duties.
- You want to select a trustee who has at least a basic understanding of your loved ones special needs condition and how that condition may play out over time.
- You want a trustee who will be willing and able to perform their duties in a timely way and who is not going to have to regularly reschedule accounting dates etc. as this will cause disruption as well as financial concerns for the special needs individual.
7. The Exempt Trust
Speak to your estate planning attorney about setting up an exempt trust. An exempt trust is a trust that is protected by law so that any income or assets owned by the special needs individual are fully protected and cannot be misappropriated. There are multiple types of exempt trusts so it’s important to speak directly with your estate planning attorney to determine which type is best for your specific situation and needs.
Are You in Need of an Estate Planning Attorney in St. Pete, Florida?
No matter what your estate planning needs are if you are in need of an estate planning attorney in or around St. Pete, Florida, Weidner Law is here for you. To set up an appointment for a consultation just call today at 727-954-8752!
