When you think of estate planning you likely think about the need to decide who will receive your assets when you are gone. While that is certainly one goal of a comprehensive estate plan, it should not be the only goal. A well drafted estate plan should also protect your assets and help them grow throughout your lifetime. In addition, your estate plan should protect you and your loved ones while you are here and continue to protect and provide for your loved ones after you are gone. In order to accomplish all of these goals, your estate plan will need to include a variety of inter-related components. Some of those components may be highly specialized in order to achieve very specific estate planning goals. For example, if you have a child with special needs, you will need to include special needs planning in your St. Louis estate plan. Your Missouri estate planning attorney can help you work out the details of your special needs plan; however, it may be helpful to learn more about the concept of special needs planning ahead of time.
Who Needs a Special Needs Plan?
If you are the parent, grandparent, or guardian of a special needs child – whether that child is a minor or and adult – you may need to include special needs planning in your overall estate plan. Only your estate planning attorney can provide you with individualized advice; however, if you plan to leave behind assets for someone with special needs, there is a good chance that you will need to include special needs planning in your estate plan.
Why Is Special Needs Planning Necessary?
Special needs planning is necessary because without it your child (or other loved one with special needs) could end up losing much need assistance for state and/or federal assistance programs as a result of gifts you leave behind in your estate plan. As you undoubtedly already know, caring for someone with special needs can be expensive. Medical bills, various types of therapy, and specialized equipment are just a few of the extra expenses you are likely to incur when caring for someone with special needs. Fortunately, there are assistance programs, such as Medicaid and Supplemental Security Income (SSI), that help defray those costs. Once your child reaches the age of majority, however, he or she will need to qualify for assistance as an adult. This means meeting income and asset eligibility requirements. If your child has income and/or assets that exceed the program limits, eligibility for assistance will be lost. Sometimes, well-meaning family members (including parents) gift assets in their Will to an individual with special needs that are to be used for the individuals care and maintenance. While this is a wonderful sentiment, those good intentions can cause the individual’s assets to exceed program limits. Remember, once your child reaches the age of majority any assets gifted to him/her will be counted when applying for government benefits. A well intentioned gift, therefore, can do more harm than good.
What Is Included in Special Needs Planning?
Given the individual nature of estate planning in general, and special needs planning in particular, it is impossible to know exactly what will be included in your special needs plan; however, many special needs plans include the creation of a special needs trust. Also known as a supplemental needs trust, a special needs trust allows you (and others) to gift assets to your child with special needs without jeopardizing his or her eligibility for much needed state and federal benefits. The trust becomes the legal owner of the assets gifted to your child while your child is a beneficiary of the trust. Trust assets can then be used to supplement your child’s care above and beyond that provided by the various assistance programs.
Very specific language must be used for a trust to be recognized as a special needs trust so be sure to consult with your Missouri estate planning attorney if you believe a special needs trust should be included in your estate plan.
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns about special needs planning, contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.
- The Importance of Having an Estate Plan - February 15, 2023
- Tis the Season for Giving - February 8, 2023
- Tax Planning for 2023 - February 1, 2023