There are ten planning steps you can take right away to take charge of your child’s future care. A typical child could recover from a failure to plan, but a child with special needs may never recover. Although some people with special needs are able to support themselves as an adult, many will need to rely on government assistance.
Most importantly, you must put in place a clear plan for the care of your children if something happens to you. This is critical: don’t leave the care of your family and assets to chance. The next 10 steps will map out exactly what you need to do.
1. Name guardians for both the short term and the long term. If you have children under 18, you must give clear legal authority for designated caregivers to take custody of your children immediately if there is an emergency. Ideally, make sure these people live within 20 minutes of your home as these are the people who will step in until your permanent guardians can arrive. And you must also designate in writing exactly who you would want to care for your children in the long term.
2. Identify the need for future care planning. If your child won’t be self-sufficient as an adult, you’ll need to make plans to secure their future. If your child is still very young, you may not be able to predict this yet – you’ll want to be hopeful, but at least plan for all possibilities. Tragically, many people with disabilities end up living in poverty.
3. Consider adult guardianship and alternatives at age 18. When your child reaches age 18, you will no longer be entitled to make decisions about your child’s finances or personal care unless you petition a judge to become your child’s legal guardian. Even though your child may not be capable of making decisions about their well-being at age 18, the law presumes your child is able. Depending on your child’s need, you can petition for full guardianship, limited guardianship (where your child is capable of making some decisions), or an alternative to guardianship such as a power of attorney.
4. Plan for and secure government benefits at age 18. Your child can become eligible for government benefits at age 18. Medicaid and Medicare provide health insurance; Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) provide monthly cash assistance. Medicaid recipients might also be able to participate in so-called “Medicaid waiver” programs, which provide supported housing and work programs.
While there is no need to do special planning to preserve Medicare or SSDI benefits, many disabled adults rely on Medicaid and SSI for full or at least supplemental support. To qualify for these programs, recipients must meet certain income and asset limits. If your child has more than $2,000 in their name or if you die and your money doesn’t go to your child the right way, it could disqualify them from receiving benefits.
Even if you think your family can provide for your child’s lifetime needs, it’s probably wise to position your child to qualify for Medicaid because of the many programs that could enhance your child’s quality of life, such as supported living and work environments.
5. Create a life care plan. A life care plan can help ensure your child receives appropriate care (whether at home or in a residential facility), identify public and private sources of support, and give you the peace of mind knowing that you are making the best choices for your child.
6. Prepare a living trust and will. Make the transition of your financial wealth as easy as possible for your family. Any inheritance your child receives would likely disqualify them from government benefits. Further, your financial assets may be subject to a court process called probate, which is a lengthy, public, and oftentimes expensive court process that could leave your loved ones without immediate and protected access to your money.
If you plan with a revocable living trust, in addition to a will, you can avoid probate and decide who has access to your children’s inheritance, without the information entering the public record and being available to predators who might be particularly attracted to vulnerable beneficiaries, such as the young and disabled.
7. Establish a special needs trust. A special needs trust is designed to manage resources while maintaining the individual’s eligibility for government benefits. Medicaid and other public benefit programs will not pay for everything your child might need. Therefore, a special needs trust can pay for medical and dental expenses, necessary or desirable equipment, training and education, insurance, transportation, and special foods. Finally, a special needs trust can help you avoid one of the most common mistakes parents make – or are advised to make – disinheriting a child with disabilities to protect public benefits. The main problem with this advice is that government programs typically finance a very minimal standard of living, and adults with special needs may not be able to supplement those benefits through work.
8. Build a team. During your life, you can manage the trust, but when you and your spouse are no longer able to serve as trustees, you can choose who will serve according to instructions that you have provided. Make sure that whoever you choose is financially savvy, well-organized, and, most importantly, ethical. Sometimes family members lack the skills needed to successfully administer a special needs trust. Instead, consider selecting a professional trustee in conjunction with an advocate/ care manager.
9. Provide enough financial resources. As a parent, it’s your responsibility to make sure you have enough savings, investment resources, or life insurance to care for your child if you can’t. Life insurance is one of the best ways to get money into a special needs trust. Work with a trusted advisor to determine exactly how much insurance would be sufficient, and designate the trust as the beneficiary of your life insurance so it doesn’t get pulled into the court process and become unavailable when it’s most needed.
10. Pass on more than just your money. Think of the knowledge you have gained spending a lifetime caring for your child. Be sure to write or record a complete set of instructions to guide future caregivers and trustees. Include information regarding residential preferences, medical concerns, preferred doctors and therapists, essential therapies, and social activities. Although these instructions are not legally binding, they can reflect your thinking on a range of issues and provide a plan for caregivers to follow.
NORELL ALBANIS is an estate planning attorney, and can be reached at 239-314-2353 or by visiting albanislaw.com.