Special Needs Planning Just in Case

Posted on August 6, 2010 by Mary W. Browning

Many parents, especially parents of young children, may be unsure at the time they are drafting their Wills if a child will qualify for government assistance in the future. The parents may be concerned that a child has a special need but may not know the extent when that child is young. Therefore, parents are hesitant to mandate that assets pass to their child in a special needs trust when such child may or may not need a special needs trust in the future.

An effective way to handle this situation is to draft a discretionary trust for the benefit of such child that allows the trustees the flexibility to create a special needs trust if the need arises in the future. A discretionary trust allows the trustees to distribute principal and income to a child for any reason in the trustee’s discretion. Alternatively, the trust could be drafted as a special needs trust now but could direct the trustees to convert the trust to a purely discretionary trust if the child no longer receives government benefits.

Parents should carefully consider the appointment of trustees of such a trust.  Because this is a lifetime trust, a parent should consider naming younger successor trustees and possibly even a corporate trustee to serve if all of the individuals appointed can no longer serve.

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Trust Advisory Committees

Posted on January 13, 2010 by Mary W. Browning

Sometimes, when a parent creates a third-party special needs trust, he or she does not want the entire burden of decision making to fall on the trustees.  Or sometimes the trustees were chosen for their financial and investment savvy and background and they do not necessarily know how to handle the day-to-day life of the child with special needs.  In these cases, the appointment of a Trust Advisory Committee by the trust creator may be appropriate.

A Trust Advisory Committee is a group of people (typically 3-5 people) chosen by the person creating the trust or chosen by the trustee who are responsible for advising and making distribution requests on behalf of the special needs person to the trustee.  The committee is designed to provide insight, advice and information to the trustee with respect to the special needs person's residential placement, emotional, social, education, medical and therapeutic issues.  The committee usually consists of family members, a social worker, care manager, accountant, attorney, nurse, friends, etc.  These advisors have no legal authority over the trust, but the trustee is required to consult with them.

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Have You Checked Your Estate Planning Lately?

Posted on March 17, 2009 by Lori I. Wolf

Just as it is important to go to the doctor, the dentist and the eye doctor and to review the status of your finances on a regular basis, it is as important to reevaluate your estate planning on a regular basis.

Over the course of any period of years, there can be multiple issues which arise – there can be changes to tax laws which affect planning decisions; there can be changes in a family’s financial situation (both increases and decreases in wealth) which affect the decisions that are appropriate; there can be changes in relationships with the people appointed to serve in various capacities (as executors, trustees, guardians); and there can be changes in situations with children which necessitate the need to revisit planning.

Where a child with special needs is involved, the need to revisit planning on a regular basis becomes even more paramount.  First, it is critical to ensure that there is adequate funding for a plan on a long term basis. Since in many situations, these children will not be able to support themselves, this issue take on heightened importance.  Further, changes in the law or in positions taken by state agencies may change what is appropriate for a special needs trust.  Evaluating your plan at least every 1 or 2 years is crucial to ensure that you have the best plan in place for you and your loved ones.

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