There’s Something Special about Estate Planning for Parents of Children with Special Needs

By Anna Sappington, Esq.

Families of children with special needs face considerations and challenges above and beyond those of normal estate planning. Unlike other parents, parents of children with disabilities may face a future in which one or more of their children requires consistent supervision, assistance, or support. While many practitioners are aware that special needs trusts can be used as a resource to supplement financial support and care provided through public benefits programs, it’s a mistake to think that a family’s needs are met merely by including a special needs trust in the parents’ estate plans.

Couples may ask their attorney about the extent of resources necessary to provide for the child with a disability. When resources are limited and children’s needs vary dramatically, it may not be sufficient to divide the parents’ estate “to my children, in equal shares.” Although expensive, circumstances may warrant the parents’ planning ahead to provide additional funding post mortem, e.g. purchasing whole or universal life insurance payable at the surviving parent’s death. In advising the amount needed to supplement public assistance, principal considerations include the child’s level of functioning, life expectancy, and longterm plans for living arrangements. The cost to a person living independently in the community who requires ongoing supervision or physical assistance generally is on the expensive side of the spectrum. Meanwhile, some families of children with developmental or intellectual disabilities struggle to prevent the child’s SSI payments from accumulating to the point of affecting the child’s eligibility for benefits. One of the challenges attendant to special needs planning is the variability of disability and individual circumstances.

Families also may seek advice regarding how best to use their assets to structure gifts. It may be advantageous to leave qualified retirement plans to a special needs trust, since a properly- designed trust is an “eligible designated beneficiary” able to avoid the 10-year payout required for most inherited plans under the SECURE Act. However, assigning particular assets to particular beneficiaries requires a plan for monitoring the shares of each beneficiary, to ensure that subsequent spending and events don’t upset the plan. Once funded, third-party special needs trusts can use tools such as administrator-managed prepaid debit cards and ABLE accounts to manage spending, supplement housing budgets without affecting benefits, and foster independence.

Finally, most practitioners – and families – give too little thought to succession planning for caregiving. A parent’s plan to keep their child at home as long as possible may backfire if the child is left alone in the family home in middle age, having never accessed any government services or supports or having had any caregiver other than the parent. A family with ample human capital (whether blood relatives or their “village”) is very fortunate. It’s more common for parents of children with special needs to tell their attorneys, “I don’t have anyone I could rely on to pick up the reins.” After all, having a disability, and having a family member with a disability, can be very isolating.

In these situations, parents may need to plan far ahead to develop connections and resources they can rely on and have confidence in when they no longer can continue providing care. Neighbors, friends, religious communities, schools, and affinity groups provide opportunities to meet people who may become meaningful sources of mutual support.

Parents can plan to utilize available public supports and programs before absolutely necessary, in order to widen the circle of people known and available to their loved one. It may be wise to cultivate a relationship with a company providing care management and/or administering special needs trusts in order to provide baseline records and future continuity of care.

Speaking of continuity of care –one self-help measure unknown to many families is the “Letter of Intent.” This letter captures the granular care information needed by a new caregiver, such as whether the person with a disability has a power of attorney or other legal representative and, if so, that person’s contact information; information regarding family members and their relationship to the child; memorialization of religious or family customs familiar to the child; a summary of medical conditions, treatments, and care providers; the daily schedule; likes and dislikes; allergies and unsuccessful treatments; and special gifts and abilities; to name a few. In a crisis, this document will provide information that will help a successor caregiver provide immediate comfort and facilitate successful living long-term.

If all of this sounds complicated: it is! However, having an understanding of some of the complexities puts you far ahead of the practitioner who thinks they can do it all based on their knowledge of estate planning, or the one CLE they attended about drafting special needs trusts. Just like any other practice area, your value as a special needs planning attorney reflects the effort you have put into learning about this specific area of practice, and your cumulative experience working with this client community. With some effort and experience, you will be able to provide genuinely helpful advice tailored to your client’s specific circumstances and needs – and they will appreciate you immensely.