Helping Clients Replace Themselves with
Special Needs Planning For parents of special needs children, the estate plan is much more than a vehicle for the transfer of wealth to the next generation. In effect, the plan must take the parents’ place in their child’s life. For parents whose child will always require the care of someone else, just the thought of what the child’s life will be like after their deaths can be agonizing. The attorney must have legal and practical tools that address the parents’ fears. The attorney also must help the parents feel confident that their plan will successfully replace the support, effort and sacrifice of the parents. Every special needs planning case is different. In this article we will discuss the additional considerations and techniques involved in special needs planning for a typical couple with a disabled child who is expected to depend on needs-based
government benefits such as SSI and Medi-Cal. Special needs attorneys must help parents consider carefully some of the decisions that are often “no-brainers” in other estate plans. One of the “no-brainer” decisions arises in planning the parents’ revocable living trust (RLT), which will usually direct dividing the trust property into shares for the children upon the deaths of the parents. In the vast majority of families, as long as there has been no estrangement or bad behavior, the parents want the children to have equal shares. This might be undesirable in special needs planning. If the parents’ resources are limited, it may be necessary to allocate a larger share to the special needs child if that child is not expected to be selfsupporting.
Most parents, when creating an RLT, will name one of their children to be the trustee on their deaths. It is very common for parents of special needs children also to presume that one of their other children is the best choice to serve as trustee of the special needs trust (SNT). However, a sibling trustee can be a bad choice for several reasons. The business dealings between a trustee and a beneficiary may cause strain in an otherwise loving sibling relationship. The job of trustee sometimes requires immediate attention to issues that can’t wait until the weekend, which can be difficult for a sibling who has a job, a family and other responsibilities. A sibling who is the trustee of an SNT will be geographically tied to their disabled sibling, possibly limiting career choices. Finally, administering an
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