What Should A Parent Of A Special Needs Child Consider When Preparing An Estate Plan
By Robert D. Hines, Esq.

It is common for Parents of a special needs child to struggle with how they will provide for their loved one when they pass. Parents want to provide for their special needs child, but they are aware that if their special needs child has a certain amount of assets, the child will not qualify for SSI, Medicaid and other government benefits. Unfortunately, because government benefits are vital to special needs children, it is common for the Parents of a special needs child to disinherit the special needs child and hope that another family member will use the inheritance to provide for the special needs child. However, there are no safeguards with this strategy.
For example, suppose a Parent has two children A and B. Child A is a special needs child and is receiving SSI and Medicaid. The Parent does not want to provide for Child A in her Will because she does not want to disqualify Child A from government assistance. Therefore, instead, the Parent will bequeath everything to Child B and hope that Child B uses the inheritance to provide for Child A. The drawback to this plan is what happens if Child B passes and the inheritance that was to be earmarked for Child A instead goes to Child Bs spouse; or Child B enters into dissolution of marriage; or Child B is sued; or Child B, or Child Bs spouse, uses the inheritance for their own personal needs.

In the example above, the proper solution for the Parent would have been for the Parent to prepare an estate plan so that Child A and Child B are both provided. However, Child As share would go into what is referred to as a Special Needs Trust. By placing Child As inheritance into a Special Needs Trust, Child As government benefits will not be adversely affected. Inheritances that are distributed into a Special Needs Trust will not be considered as a resource when determining eligibility for SSI and Medicaid. Therefore, Child As inheritance, if it is disbursed into a Special Needs Trust, will not be considered an asset by the government and Child As government benefits will not be adversely affected.

The funds that are in the Special Needs Trust can be used to supplement what is not being provided to Child A by the government. This includes costs associated with healthcare, entertainment, education, transportation and any other services that will improve Child As quality of life. At the passing of Child A, the remaining funds that are in the Special Needs Trust can be distributed according to the Parents wishes, whether to Child B, or the Parents grandchildren, or to a charity, or to any other beneficiary.

A Special Needs Trust allows a Parent to leave an inheritance to a special needs child while ensuring that the Childs eligibility for government benefits is protected.

Robert D. Hines, Esq.
Hines Norman Hines, PL
1312 W. Fletcher Avenue, Ste B
Tampa, FL 33612
813-265-0100 (Office)
813-265-4848 (Fax)