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Friday, October 23, 2020

Estate Planning in 2021: Special Considerations for Parents of Special Needs Children

Parents of children with special needs have many extra responsibilities, whether the child is a minor or an adult. All parents are mortal, but when you have a child with special needs, you think about the fact that one day you will not be here to take care of your child.

A Florida special needs estate planning attorney can walk you through your options and evaluate the special considerations for parents of special needs children. Setting up your estate plan will be tricky because you want to provide for your child without destroying his eligibility for government assistance programs like Medicaid and Supplemental Security Income (SSI).

How Inheritance Can Harm Your Child Financially

An inheritance can make your child ineligible for government assistance, even a modest gift from a close relative. The resources limit for SSI benefits is usually $2,000 for an individual.

Let’s say that a grandparent or someone else leaves your special needs child $5,000 in a will or standard living trust. This inheritance could cause the child to lose his Medicaid health insurance, monthly SSI check, assisted housing, employment training and support, and other valuable benefits.

Replacing all of those things for even a few months would cost more than $5,000. In very little time, the child would have spent the $5,000 to pay for those things and have no government assistance.

It is essential to talk to your close relatives from whom your special needs child might inherit about how to set up their estate plans so that they do not inadvertently cause your child to lose his government benefits. Even if your child does not currently receive help from public programs, he will likely do so at some point in the future. The last thing you would want is for your child to be destitute and ineligible for the public assistance programs he needs after your death.

Options for Parents of Children with Special Needs

There is, however, no reason to despair. You could set up a Special Needs Trust. If this estate planning document gets written, funded, and administered correctly, you will be able to set up an income stream for your child without losing the right to public assistance benefits. The child will not have direct access to the assets in the trust. The trustee will manage the money and authorize expenditures according to the rules for special needs trusts.

Another option is to give the disabled child’s portion to a trusted sibling with the understanding that the inheriting sibling will take care of the child with special needs. Many things can go wrong with this approach, such as financial mismanagement or failure to honor the unwritten plan for the use of the funds.

If the inheriting sibling goes through bankruptcy, gets divorced, or gets sued for some unrelated liability, the courts might take the money intended for the child with special needs and distribute it to others, like creditors. A Florida special needs estate planning attorney can talk with you and help you determine which option best meets the needs of your family. Contact ours today.


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The Law Office of Jeffrey A. Herzog, P.A. assists clients in Florida, including North Pinellas County, Palm Harbor, Trinity, West Pasco County, and the surrounding areas.



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| Phone: (727) 789-4000

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