As a parent, you naturally want to do everything you can to ensure a safe and comfortable life for your special needs son or daughter. Unfortunately, no parent can plan to be there for the entirety of a child’s life. This stark reality may worry you greatly as you contemplate your child’s future after you pass away.
Even if your child requires substantial care and support, estate law offers you viable options for planning your special needs child’s financial future. Guidance from an estate planning lawyer in Indiana could help you adopt strategies for building long-term peace of mind for all involved.
Preservation of Government Benefits
Many special needs children need support from government programs throughout their lives. By the time your child turns 18, you should make a plan to ensure access to government benefits throughout your child’s adult life.
Medicaid and Supplemental Security Income are the two primary government benefits that most special needs families must maintain for their adult children. Housing, medical care, and other services rely on these public resources for payment. In Indiana, a person cannot have more than $2,000 in assets to qualify for Medicaid. An individual with assets above this threshold, no matter how small, cannot get benefits unless the assets qualify as exemptions.
Unless you have the financial resources to fund your child’s whole life, you will need to limit your child’s assets and income upon reaching age 18 so that you child does not lose access to government benefits. Realistically, even if you have significant resources, the value of the government benefits over the life of your adult child could easily exceed even generous family contributions.
An Indiana lawyer could explain methods for limiting the assets in your child’s name. As a firm practicing estate law, Webster & Garino, LLC, has guided many families through this process.
How to Use Trusts to Support a Special Needs Person
Laws for estate planning in Indiana enable the use of trusts to insulate your child from asset acquisitions that would cut government benefits. You could establish a special needs trust, which can also go by the name supplemental care trust. You would place money and assets for your child’s future support into the trust. In the eyes of the law, the trust owns the assets. It allows the child, the trust’s beneficiary, to keep personal assets below the threshold for collecting Medicaid and other government benefits.
The trustee could then pay for goods and services that your child might need. In this way, your child would have some resources to rely upon over the long-term while still qualifying for public programs. A trust could increase your confidence that your son or daughter will enjoy a quality of life beyond a total reliance on government programs.
An estate planning lawyer in Indiana could help you explore the advantages of setting up a third-party special needs trust. The third-party trust might be a good fit for your family if you have an inheritance that you wish to set aside for your child. A living trust or your will could distribute the assets to the special needs trusts.
The good news here is that a special needs trust is not a tool enjoyed exclusively by wealthy families. You need only cover the initial expenses of setting up the trust and trust administration. Placing money in the trust might not occur until your passing. For example, the trust could be ready to hold your life insurance payout and direct funds as needed to your adult child. Other members of your family who wish to help your child could also contribute to the trust at any time.
In other situations, you may need a self-settled trust. This type of trust receives assets that are already in your child’s name. For example, some disabled people receive personal injury settlements. You could send the settlement money to the trust. This preserves the adult special needs person’s access to benefits. The law allows you to redirect these funds by reserving the right to reclaim leftover money in the trust upon the beneficiary’s death.
Establishment of Independent Living Arrangements
Depending on your child’s abilities, you may be able to help your child transition to adult life. Workplace assistance for people with developmental disabilities could connect your child with a job. Your adult child might find an apartment or group home and develop the skills to live more independently.
This path does not work for all special needs families. If your child needs daily hands-on care, you will have many more expenses to consider over the long term. You will have to consider where your child will live, who to name as a guardian, and how to coordinate benefits with your family’s estate.
We take the time to understand your unique circumstances and goals when planning for your child’s future. We also appreciate the depth of your emotional concern as you grapple with these critical financial decisions. To make an appointment with an Indiana lawyer, call our office at 317-565-1818 today.
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