Q: My husband and I were told that we need special estate planning documents because we have a child with autism. Is that correct? What kind of documents do we need?
A: This question is perfectly timed as we just celebrated National Autism Awareness Month in April. This month has been set aside each year to educate the public and bring awareness to the many issues surrounding autism. An important part of this education is teaching families how to properly protect and plan for their children with autism or other special needs.
Estate planning for families with special needs children is vital. If you do not plan properly, your child may lose the public benefits they so desperately need to maintain the quality of life they have become accustomed to.
There are different categories of public benefits that a special needs loved one might qualify for. The first category is called Entitlement Programs. These programs don’t require low income or assets in order to qualify. The two most common Entitlement Programs are Social Security Disability Income (SSDI), and Medicare.
The second category of public benefits are known as “Means-Tested” Programs, which include Supplemental Security Income (SSI), Medicaid, In Home Supportive Services, Subsidized or Section 8 Housing and Temporary Aid to Needy Families. It is critical that these “Means-Tested” public benefits are preserved for those with special needs. The loss of Medicaid can be devastating for them. “Means-Tested” Programs generally do not allow a person participating in the program to have more than $2,000. Thus the receipt of an inheritance will disqualify a special needs loved one until he or she has spent the inheritance down to $2,000, at which time they will have to re-apply to once again receive those benefits.
At the very minimum, each family with a special needs child should have the following documents in place:
1) A Last Will and Testament– This document appoints the guardians you want to care for your special needs child when you no longer can. If you do not have a guardian listed, the courts will appoint one for you.
In addition, a letter of intent should be written. This is not a legal document, but it may be the most important thing a parent can do for a child and the appointed guardian. The letter of intent outlines everything a guardian will need to know about the special needs child. It provides instructions that will enable them to keep the child’s life as consistent as possible.
This letter should answer some of the following questions: What activities does the child enjoy? What is their daily schedule? What are their likes and dislikes? What medications do they take? What treatments have worked and not worked? Do they have a favorite blanket or toy? If written properly this letter will give clear instructions and guidance to guardians, creating stability at a time that will undoubtedly be overwhelming.
2) Special Needs Trust– The greatest public benefit your child is receiving is their health care. In order to ensure that your child maintains eligibility for such benefits, you cannot leave an inheritance directly to them. With a special needs trust you can ensure that your child receives the inheritance you wish to give them without disqualifying them from public benefits.
The assets in the special needs trust can be used to supplement the needs of the child. As long as the inheritance is kept in the special needs trust and used properly by the trustee, the child will continue to qualify for public benefits, including Supplemental Security Income (SSI) and Medicaid.
Be aware that many of the available public benefits are continually being decreased as congress tries to cut costs. This means that their parents will need to provide more supplemental income than in times past. It is estimated that the lifetime costs to care for someone with a severe disability could range anywhere from $5 to $10 million.
You can ensure that your loved ones are properly cared for with a living trust from MH. For more information or to schedule your free consultation, contact us today at 888.222.1328.