Special Needs Planning

{4 minutes to read}  Special needs planning comes about when we have clients that have a dependent (child or adult) who is not going to be able to take care of himself or herself when the parents are gone. Taking care of this special needs individual is a very, very important part of estate planning.

The challenge for many who have children is the sense of responsibility they feel for the wellbeing of those children throughout their lifetimes. They will do anything for them, but that responsibility ends when they are gone.

That can’t be said for parents who have dependents with special needs because the responsibility to take care of them continues past your lifetime — and if you’re married, the lifetime of your spouse. The planning that is necessary for people that have children with special needs is a little bit more complex because it concerns government programs that will provide money for housing as well as other things. Those individuals only get those government benefits if there is little to no money in their name. In other words, if I leave my assets to my special needs dependent, I run the risk that they may lose these government entitlement programs.

So, what do you do? 

You want to make sure that those dependents are okay, and that they are not just going to be getting whatever the government deems appropriate. So when you create an estate plan in this type of situation, you don’t leave any money directly to the dependent with special needs. You leave that money in what we call a special needs trust.

The special needs trust has language that allows for the things that the special needs individual wants, but the language in the trust would say that these things are supplemental to what the government will provide. The special needs trust protects the special needs dependent from a position where they would forfeit those benefits that are provided by the government.

This type of planning is paramount. If you have a dependent with special needs, you should definitely speak to people like us, or your estate planning attorney, who understand how to draft special needs trusts either as part of your will or as a separate special needs trust that is established today.

Now, sometimes we don’t have the ability to fund that special needs trust, meaning that we don’t have assets that we know are going to flow into that trust. At that point in time, we can help clients understand how life insurance, whether it be single life policies or second to die policies, can be used to fund these special needs trusts. This is a huge help for these families because they can leave a large amount of money for the special needs dependent with a small premium commitment.

It is critically important to get this planning correct so as to avoid any loss of these government programs. If you would like to learn more, get some material to read on this, or have a conversation with us, give us a call or send us an email.

We look forward to hearing from you. Thank you.

Registered Representative offering Securities through American Portfolios Financial Services, Inc. (APFS) Member FINRA/SIPC. Investment Advisory Services are offered through G&G Planning Concepts, Inc. which is not affiliated with APFS.  Strategic Wealth Advisors Network and Gassman Financial Group are not affiliated with APFS.

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