Most people don’t want to think about estate planning. Inevitably, the process forces people to think about what will happen after they’re gone. But estate plans give power to those who use them. They allow you to care for your family members and make their lives easier. And they allow you to create tailored, long-term plans to help children with special needs.
As the Ohio Developmental Disabilities Council notes, the parents of special needs children have more reason to plan their estates than nearly anyone. This is true even if you’re squarely in the middle class and just managing your mortgage and insurance payments every month.
Why is special needs planning so important?
There are many reasons for people to plan their estates, but special needs planning goes a step further. The main reason parents pursue special needs planning is to make sure their deaths don’t prevent their children from receiving the care they need. You might appoint a guardian and grant someone power of attorney, but you may also want to pay careful attention to how you arrange the distribution of your estate.
Parents who don’t plan their estates may accidentally block their children from needs-based benefits such as SSI, Medicaid, food stamps and housing vouchers.
Is my estate large enough that I even have to worry about it?
Your estate is more than your home. It includes everything that you own, whether individually or jointly, as well as all accounts in your name, including your 401(k) and Social Security benefits, along with any other investments and life insurance policies you may have. Upon your death, all these assets will be divided up and distributed. If you don’t come up with your own plan, the state will divide them up according to the laws for intestate succession.
Meanwhile, the requirements for many needs-based benefits are very strict. Some are only available to people with assets worth less than $2,000. The sudden influx of cash from the sale of a house or the disbursement of a life insurance policy can disrupt the balance.
What’s the best way to handle special needs planning?
As with most things, there’s no one single answer to fit all sizes. The best way for you to handle your special needs planning depends on your specific circumstances. Even so, most families find that simple wills do not cover all their needs. Especially if your estate isn’t very large, the probate process can carve a significant chunk out of the assets you would leave behind. And wills have limited ability to address the long-term needs of people with disabilities.
As a result, many parents will create special needs trusts that allow their children to remain within the limits of their needs-based benefits, but that also allow them to enjoy extra resources. There are some extra, up-front costs and complications associated with the creation of a special needs trust, but they can lead to greater flexibility, privacy and ease of use in the long run.
How can I plan my estate?
As the Ohio Developmental Disabilities Council article on special needs planning shows, there’s a lot to think about. Your decisions will have consequences long after you’re gone, and you won’t be around to correct any mistakes. An attorney can help you understand the different options and how each choice might affect your loved ones’ futures.
No one lives forever. We all face the possibility of a future in which we can no longer care for our children. And a solid estate plan is the closest many of us can come to being there for our children even after we’re gone.
