When leaving money to a child with special needs, there are more factors to consider.
Your children are the light of your life.
So how do you take care of them after you have died?
As a parent of a child with special needs, this question may seem more daunting.
Where do you begin?
According to a recent Tickertape article titled “Estate Planning for Special Needs Children: Trying to Be Even-Steven?” you should start by determining what federal benefits your child can receive.
You will not want your estate planning to make your child ineligible for this support.
This includes Supplemental Security Income and Medicaid.
Often a person will qualify for Medicaid, if he or she qualifies for Supplemental Security Income.
Both of these take into account financial need.
The asset threshold for Supplemental Security Income is $2,000 for the individual seeking to qualify.
Why is this important to know?
If you leave an inheritance to this child, he or she could become ineligible.
They would no longer receive financial assistance from the government for therapy, housing or medical payments.
Does this mean you cannot leave any inheritance to support your child?
One option you have is to set up a Special Needs Trust.
This can help your child qualify for government aid while receiving assets from your estate.
The trust serves as a third party to hold the assets and its trustee will distribute money to the child according to your instructions.
This trust may still be taxed on the income generated by the trust.
You should work with an experienced estate planning attorney to determine whether this is a viable tool.
He or she will be able to set up a Special Needs Trust to meet your goals.
Remember to discuss your plans with all of your children so they understand the reasons for your estate planning choices.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Tickertape (June 14, 2017) “Estate Planning for Special Needs Children: Trying to Be Even-Steven?”