by Tina Seymour Demoran, Esquire
Like any parent, you fear the nightmare of your own untimely death or disability, where there is the danger of your child becoming a ward of the court.
To prevent this outcome, you need to plan for the child’s care.
An estate plan can help to spell out who should assume the responsibilities for your child’s care.
This is essential because – in cases where there is no estate plan in place – the court will appoint whoever it believes would be a reasonable guardian.
A judge has large discretion in making this appointment, and it’s likely you would not have made the same choice.
For example, if there are no qualified family members available, or if the court decides family members are unsuitable, the judge may appoint a professional guardian who is a stranger to you and your child.
Professional guardians are not without their own limitations.
If the guardian needs to undertake significant financial transactions on your child’s behalf, judicial approval is usually required.
While this may seem logical in theory, we face a heavily burdened judicial system, and it may take weeks or months before the transaction can be reviewed and approved by the supervising judge.
This can create undue delays in providing care for your child.
Further, as the court is supervising the professional guardian, there’s a good chance the guardian will hire an attorney to help navigate the legal system.
Fees for such attorneys, as well as fees for the guardian and the court itself, will come out of the estate you’ve left for your child.
Tips – Planning for a Special Needs Child
Here are three reasons why estate planning for a special needs child is crucial.
1. These children have more needs. They may require special treatment, therapy, housing, education, equipment, in-home care, etc.
All of these services can be very costly, and the need for this care may extend throughout the child’s lifetime.
2. While some alternatives may seem attractive, estate planning is the only way you can provide for your child without jeopardizing the child’s eligibility for government and private benefits.
For example, many social benefits can be lost if the child has large assets. This leaves parents with a dilemma – give the child assets and hope it is enough to meet the child’s needs, or basically leave the child with very little in order to retain eligibility.
An experienced estate attorney can help with this problem by creating a Special Needs Trust (SNT). This trust allows parents, grandparents or guardians to provide funds for a special needs child without effecting the child’s eligibility.
You may act as Trustee while living, and thus you have complete control over the child’s finances.
In the event of your death, your Successor Trustees will step in to supervise the child’s finances.
This can eliminate the chance of a court appointing a guardian you don’t know.
You are the one who decides who the Successor Trustee will be and you can ensure that it is someone you trust.
This can be a friend, relative, or you may appoint a bank or licensed professional to serve as Trustee.
You will need to work with your attorney on this to set up specific instructions for Trustees.
The law requires them to comply with these instructions.
Best of all, the SNT will preserve the child’s eligibility for benefit programs.
3. You need to protect your child’s financial interests today as well as in the future, when you may no longer be there.
Naming a Beneficiary
Another issue arises when you have named the disabled child as a beneficiary of your insurance policies, qualified pension plans, stocks, and other financial instruments.
Sadly, this may not achieve your intended purpose.
Neither the financial institutions nor the probate courts will give that money to a minor child. Instead, the money will be given to a guardian to hold in trust for the child.
Further, if the parent hasn’t appointed this guardian, the court will do so, and it’s likely you would not have chosen the same people to act on behalf of your child.
The process of planning for the needs of a special child demands a complex set of decisions and plans.
Each consideration is part of the complications anyone can expect with the process.
This is why parents should consult with an experienced estate attorney to help them determine what options are available and resolve all of the issues described above so that they can be at ease knowing their child will be taken care of in the event of their untimely death.
(The above information is included in our Special Needs’ Presentation, which is provided free of charge to local organizations by Seymour Law Firm, PLLC. If you would like for us to provide this free seminar for a group or organization, please call us at 228-697-3476.)