Life Planning Considerations for Parents of Special Needs Children
As a parent, you feel the need to plan for everything, including the contingencies in the event of your death. Having a special needs child makes planning even more imperative. Making arrangements for your own passing is a daunting task, and handling legalities and finances can be stressful. However, in the end, you’ll have the peace of mind that your child will be taken care of if you were to become ill or pass.
Handling the Legal Aspects
A power of attorney is a legal document that allows a person to act on someone else’s behalf, managing financial affairs and making health care decisions. This person is called an agent or an attorney-in-fact. You’re probably the current power of attorney for your child. However, if you were to fall ill or pass, someone else would need to be appointed as the agent, which is why you should have a backup. A successor agent takes over power of attorney duties from the original agent if needed. You can also revoke a power of attorney at any time and assign a new one, so if you’re elderly or preparing to pass, you can assign a new power of attorney instead of naming a successor agent.
Transferring property to your child will help to guarantee he always has a home. One way to transfer the deed of your property is through a quitclaim deed. A quitclaim deed does not guarantee the quality of the grantor's title; therefore, it’s usually a method used by people who know each other, particularly family members. If the property transfers ownership without being sold, meaning no money is involved, quitclaim deeds are a common choice.
Many disabled and special needs children qualify for means-tested benefits, such as Supplemental Security Income (SSI) or Medicaid, which typically have a $2,000 asset limit. Transferring the home directly to him will not affect his eligibility, as long as the home remains his primary residence. However, if your child were to reach a point where he could no longer live in the home, it would become an available resource and put your son over the asset limit. For this reason, you may consider also using a special needs trust (SNT).
Handling the Financial Aspects
When planning for your child’s future after your death, you want to ensure sufficient funds are available for them. You also want to provide the proper supervision, management, and distribution of an inheritance for the special needs child. Both of these can be accomplished through a third-party created and funded special needs trust (SNT). You must appoint a trustee of the SNT, which can be a family member or a third party appointed by the court.
Although you may think willing a lump sum of money to your child is a good idea, it can disqualify him from means-tested benefits. Setting up an SNT ensures your child has the finances available for his lifelong care without losing benefits. It can also be used to set up inheritance funds or earnings from a settlement on behalf your child.
An SNT is created with the specific needs, lifestyle, and future of your child in mind. The money in the trust can be used to pay for personal care attendants, furniture, medical and dental expenses, education, vehicles, physical therapy, and even recreation and vacations. If your child were to need home modifications – such as a chair lift, a wheelchair ramp, or a walk-in bathtub – the money from the SNT could be used for funding purposes.
While planning for your child’s future and what will happen after you pass is stressful and frightening, not having a solid plan in place could be detrimental for your child’s future. Be sure you have the legalities and financial aspects in line. Before making any decisions and to guarantee everything is properly set up, seek the advice of a qualified attorney. Consider contacting someone who specializes in planning for special needs children.
About Jackie Waters
Ms. Waters is a mother of four boys and lives on a farm in Oregon. She is passionate about providing a healthy and happy home for her family, and aims to provide advice for others on how to do the same with her website: Hyper-Tidy.com.