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Michigan Special Needs Trusts Special Needs Planning Special Needs Attorney
Special Needs Planning for Disabled Children
Americans in general – including those with disabilities – are living longer. Many disabled children (both minors and adults) rely on their parents for support. When you can no longer care for your disabled child due to your own disability or death, what happens? Where will your son or daughter live? Who will make financial decisions? Who will make sure your son or daughter gets the proper care?
As a parent, how you plan will make a critical difference in your child’s life and in the life of other family members who may take over for you when you are disabled or gone?
What is the first step? Set up a complimentary consultation with our firm to talk about your specific situation, and lay out a plan for your son’s or daughter’s future. That plan should include:
- A “Care Plan”: For example, what will the living arrangements be, and who will oversee medical decisions and monitor routine care?
- A “Financial Plan”: Many parents don’t know that a direct inheritance by a special needs child who receives governmental benefits (like Medicaid or SSI) will result in the termination of those benefits unless the inheritance is properly structured. You may also consider life insurance to fund your disabled child’s future needs. DO NOT, and I repeat, DO NOT – just leave assets to one of your other children to manage for your disabled child. This can cause many problems – it puts the child in charge in a tough position of having to make decisions without the benefit of your experience or written guidance. Money given to another child is subject to a claim in that child’s divorce, bankruptcy, or by that child’s creditors. Also, if the child who receives the funds dies before your disabled child, there will be no plan in place to make sure your disabled child is properly cared for.
Supplemental Needs Trusts (or “Special Needs Trusts”)
You may have heard the terms “supplemental needs trust” or "special needs trust” – these terms are used interchangeably. This special type of trust allows a disabled beneficiary to receive gifts, inheritances, lawsuit settlements or other funds without losing his or her eligibility for certain government programs. The trust, and not the beneficiary, legally owns the funds, so the funds are not counted for determining eligibility. A supplemental needs trust is created to provide for the “extras” that are not available from public assistance.
Planning for your disabled son or daughter will make a major difference is his or her life. You must take the first step.