If you have a child or adult relative with special needs, you may have already included a special needs plan in your overall estate planning. If not, you definitely should. A special needs plan is a necessity for all families with a loved one who is disabled in some way. Special needs planning is not a simple task, however. There are many common mistakes to avoid in special needs planning, which could potentially make your planning efforts worthless.
Why is a special needs plan important?
Caring for a disabled person can be a huge challenge. They require assistance with medical care and their personal needs, possibly including management of their financial affairs. Providing the special care they need can be expensive. As such, many disabled people receive assistance from need-based government programs, such as Medi-Cal. If this is the case, it is crucial that you know how to also protect their eligibility for those benefits programs, while still providing for their care. Special needs planning is designed to do just that.
Don’t rely completely on other family members
While we would all hope that family members would step in, without hesitation, if we needed them, it is not always safe to make that assumption. Sometimes your relatives are actually unwilling, or even unable, to provide the help you may need.
In the case of special needs children, parents too often make the mistake of assuming family will automatically take care of their children, if something ever happened to the parents. Even if that is true, you should not neglect to, at least, provide a foundation for the special care that is needed. Providing continuity of care for special needs individuals is very important, and a special needs plan can provide that.
Don’t forget to fund your special needs trust
A special needs trust is essential, and will typically form the basis of your special needs plan. The trust will own and protect the assets you set aside to cover the care your loved one will need in the future. Some clients make the mistake of merely creating the special needs trust document, but taking no further steps to complete the task. Unless a trust is “funded,” it has no value.
The actual assets or property that you want included in the trust must be transferred to the trust. Often, this means simply changing the ownership from you to the trust, for instance. Depending on the type of property involved, there may be more steps required. Your estate planning attorney can assist you with this process.
Don’t procrastinate. Create your special needs plan now
Probably the most costly mistake you can make is putting off special needs planning until “later.” A lot of thought and planning go into providing the daily care and attention your loved one needs. The only way that can continue, if something were to happen to you, is if you have a special needs plan in place.
You should start your planning as soon as possible, because, unfortunately, you can never predict what may happen in the future, or when. If you die or become incapacitated before you can complete your special needs planning, your child or other family member could be left to rely on others, who may not be equipped to do so properly.
If you have questions regarding special needs trusts, or any other special needs planning issues, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.
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