How to Plan for the Long-Term Care of a Special Needs Child
Parents of special needs children are naturally concerned about how that child will get the care he or she needs after they are gone. There are several ways to plan for the care of a long-term disabled heir, including:
Special Needs Trust – A special needs trust can be established by a parent or grandparent for the care of a child or grandchild of any age in lieu of leaving an inheritance, which would likely disqualify a special needs person from receiving necessary government assistance.
Parents of a special needs child who also have other children are often tempted to leave their assets to the other children with the understanding that they will take care of their disabled brother or sister. However, if one of those children gets a divorce, files bankruptcy or pre-deceases the disabled child, those assets could go to an ex-spouse, creditors or others. To prevent this from occurring, parents should divide assets among all their children equally but place the disabled child’s assets in a special needs trust and add to it with a permanent life insurance policy.
Qualified Personal Residence Trust – typically used to remove property from a taxable estate, a qualified personal residence trust (QPRT) can be used to provide housing for a special needs child while enabling parents to stay in the home until they die. A QPRT allows parents to stay in the home with a disabled child and, once the parents die, will transfer ownership to an heir – say, another adult child or a charity – at a discount to the current market value.
If you’d like to learn more about important legal protections for special needs children or have other estate planning questions, call our office today to schedule a time to speak with a Personal Family Lawyer®. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, we’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.
