Five Key Measures for Estate Planning in Special Needs Cases

When it comes to planning your estate, you need to keep in mind that you are doing so for the benefit of your family, friends, and beneficiaries. The cold truth of estate planning is that you will most likely not be around to experience the benefits or harm caused by your estate planning diligence. After you pass away, it would be the executor of your will, the trustee of your trust, or the administrator of your estate who must deal with the steps you laid out for your estate plan. 

Depending upon how well you planned your estate this could be a rewarding experience for the people in your life. Or, if you did not put as much thought into the process as you would have liked your family may find themselves in a position where they are not only grieving your loss but having to sort through finances on top of that. Talk about adding insult to injury. What you should want to do is maximize the ability of your beneficiaries to spend their time remembering you rather than spending too much time having to focus on the logistics of your estate and finances. 

When you have a special needs family member then this is especially important. A special needs person requires additional thought and consideration as far as how you are going to leave him or her property and assets at the time of your passing. Whether this special needs person is a family member, friend, or someone different altogether, your planning now can change the life of the special needs individual for the better. It is not an exaggeration to say that your proper planning can be the difference between a good life and one full of struggle for him or her. 

In today’s blog post from the Law Office of Bryan Fagan, we are going to cover five key measures for estate planning in special needs cases. For those of you who have a special needs person in your life who is important to you then this blog post is designed just for you. We are going to walk you through the sort of planning and thought processes that can be the difference you wish to make for your special needs friend or family member. Along the way, we will help you think more critically about the specific steps you need to take when planning your estate with this person in mind. 

Our lead estate planning attorney, Megone Trewick, would love to talk to you about your estate planning questions and thoughts. She and our other experienced estate planning attorneys are available six days a week in person, over the phone, and via video to discuss your situation. A free-of-charge consultation is only a phone call away. Whether you have a specific question about something you read in this blog post or want to ask general questions about estate planning, we are here for you. 

#1: Think about the specific needs of your special needs family member

We are going to be talking about special needs people in a general sense today in our blog post. However, when you are planning your estate, you cannot afford to think about special needs people in a general sense. Rather, you will need to take into consideration the specific circumstances, needs, and abilities of your special needs family member when you are mapping out an estate plan. Think hard about that person and what their life is like now and what their needs are likely to be in the future. This will position you well to be able to understand how he or she needs to be accounted for in your estate planning. 

If your special needs family member has a physical disability then you may want to plan out for persistent medical care, updated technology in assistive devices, possible remodeling or updating the home of your loved one to account for special needs assistance as well as how therapy can help him or her manage their impairment. In some cases, your loved one may improve themselves to the extent possible so that assistance is not necessary in the future. Take him or her where they are now and then consider where they may be in the future while you are estate planning. 

A mental health impairment can be especially challenging to prepare for. Mental impairments can be chronic and long-lasting. Or, with the help of support groups, therapy, and medication, these impairments may be managed quite well. Of course, it can be very difficult for you to consider where your loved one’s condition is going to go in the future. You can talk to your child’s doctor about their condition to see how best to plan as far as their specific medical needs are. If your loved one is an adult, then you may perform some basic research on their condition and then speak to one of our estate planning lawyers about how to help translate those needs into a well-thought-out estate plan. 

No matter what, you should be diligent about your planning based on the specific needs of your family. Most of the time this planning will not cost you any money. Rather, it will just cost you time away from other activities where you spend it planning your estate currently. In the long run, however, your loved one will thank you for your diligence and the effort that you put into planning on their behalf. 

#2: What benefits are your loved one receiving right now?

It is common for people with special needs to rely upon government benefits to pay for medication, medical equipment, assisted living, and/or nursing home care. The way that this type of benefit works is that the provider of the benefits will need to periodically review the income and assets of the special needs individual to verify eligibility for that program. In many cases the ability of a person to receive a benefit from the government requires him or her to have less than $2,000 in assets to their name. This is below the definition of “poverty” that the federal government has. In other words, your loved one may need to be destitute to qualify for the benefit. 

Why does this make a difference to us in today’s blog post? Many people in your position, as someone who wants to help a special needs individual provide for their needs, believe that they are unable to do so because of the income restrictions and asset caps that these programs have. This is not accurate, however. You can have your special needs loved one be a part of your estate planning and not have your generosity conflict with their benefits. You need to be careful about how you structure the estate planning and to have a plan on how you are going to accomplish your goals.

A special needs trust is a tried-and-true method of estate planning if you have a person in your life with a mental or physical disability. The special needs trust allows you to leave money or property to the special needs individual in a way that the government cannot use that generosity to count against the cap or limits placed on assets or income. Working with Megone Trewick and our team of esteemed estate planning attorneys allows you to take your generosity, develop a plan, and put that plan into motion. 

#3: Guardianship

Guardianship allows an adult to care for another person who is unable to make good decisions for themselves due to a mental or physical impairment. If the person in your life who has a special need is your spouse, then you may already be his or her guardian. In that case, there are several different options as far as how to leave money to him or her after you pass away. With Texas being a community property state certain property will pass to him or her upon your death automatically. 

However, the difficulty comes into play on the periphery of issues like this. For example, let’s say that you and your spouse live in a fully paid-off home. Then one day you are putting up Christmas lights on the house when your foot slips and you pass away. The family home would automatically pass to your spouse for as long as she lives even if you do not have an estate plan. Does that mean that you should risk it for your special needs spouse? Not at all. What this means is that you should discuss the possibility of guardianship with your family on behalf of your spouse so that things like property taxes, house maintenance, HOA fees, and the like can be paid for on behalf of your spouse after you have passed away.

What guardianship will also do is allow you or a family member to become the guardian of your spouse’s “person” rather than her finances as well. For example, your daughter may be the guardian of your spouse’s day-to-day life as far as getting her to the doctor, helping make decisions on her behalf, and generally planning those sorts of routine events. This could be completely necessary based on the specific situation that your spouse finds herself in. 

At the same time, you could create a special needs trust that accounts for the financial assets that you will be leaving to your spouse after you pass away. You could make your daughter the trustee of that trust or appoint a completely different person to that role so that your daughter does not feel overwhelmed by the responsibilities she has concerning your mom. It may also be a good idea to spread out the responsibilities just in case something were to happen to your daughter or if she started to make bad decisions on behalf of your spouse.

#4: Survivorship 

This is something that we have discussed in part earlier in this blog post, but I think it bears mentioning in greater detail. Every one of us wants to think that we are going to live to a certain age. We see older people living their lives and we think that someday this will be us. Although the percentages say that we will have that opportunity it is no sure thing. It may sound dramatic or difficult to hear that, but it is the absolute truth. None of us are going to make it out of this life alive. 

With that in mind, each of us needs to think long and hard about how we are going to plan for end-of-life scenarios. With you having a spouse or loved one with a special need, you especially need to consider your options in hopes of being able to successfully plan for a smooth transition and distribution of your assets to their intended beneficiaries. Several estate planning methods are not complicated but can help you to be able to achieve your goals. Two that readily come to mind are wills and trusts.

A will can allow you to name a specific person who can take up ownership of any assets that you choose after you pass away. If you pass away while married it would be your spouse who would receive your property in large part- specifically community property. However, separate property of yours can be left to other people in whatever form or fashion you choose. If you fail to do so then it would be your children who would stand to ultimately inherit your separate property were you to die without a will. 

Trusts allow you to leave property to beneficiaries named in the trust document. The trust would become the legal owner of the property once the trust is created, and property is placed within it. A trustee oversees all aspects of the trust including distributing property to the beneficiaries when it comes time to do so. If you have a special needs person in your life, then a trust may be a good way for you to plan for their future. 

Another reason why trusts are such a popular form of estate planning is that they can ensure that your assets are passed to beneficiaries without having to first go through probate. Probate is the legal process, through a probate court, by which assets, property, and debts of deceased people can be settled. Usually, this takes place for persons who die without having engaged in estate planning. Since probate can take time and money it is usually best to avoid probate when possible. Creating trust is one method to avoid probate successfully. 

#5: Distribution of your assets

Ultimately, what you want to do with your estate plan is ensure that your loved one with special needs can have property passed down to him or her in a way that best cares for them in the future. This can be a difficult situation to find yourself having to concern yourself not only with estate planning but to do so in a way on behalf of a person who may come to be completely dependent on the property left to him or her in that estate plan. 

At the end of the day, you need to be intentional about what you do with your estate plan. Intentionality means that you will need to focus on your goals, and the needs of your loved one and to come up with a plan that ties the three of those components together. This is not easy. By reviewing this blog post and thinking long and hard about estate planning it shows that you are not wandering into this subject by any means. However, having good intentions is not going to take care of your special needs loved one. To do that, you need to be able to develop an actionable plan that can help your family- including your loved one with special needs. 

No matter what estate plan you choose to implement for your family, friends, and other beneficiaries you need to have peace of mind for the time being. Circumstances can change and as a result, you will need to be flexible in terms of how you plan your estate. You may need to completely revise the plan if your goals change. 

When you have a changing dynamic at home, a special needs loved one, and other circumstances to account for, having an attorney to help guide you is essential to this process. The attorneys with the Law Office of Bryan Fagan appreciate you spending part of your day with us today. We are here to serve you in the same way that we have served thousands of our neighbors here in Texas. We place your goals at the forefront and do everything we can to help you achieve those goals within the confines of the law and your case.

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