I had the pleasure of serving on the attorney panel for the East Ascension ARC Life Planning for Persons with Disabilities Conference in Gonzales on April 30, 2016. Much of the program focused on SSI, SSDI, Medicaid and special needs trusts. This blog post will review some of the planning concerns of families who have loved ones with special needs. Understanding the necessity for special needs planning is a must for all who assist families with children, grandchildren or other loved ones (such as parents) with special needs.
Don’t attempt to disinherit the special needs beneficiary. Many disabled persons receive Supplemental Security Income (“SSI”), Medicaid or other government benefits that provide basic food, shelter and/or medical care. The loved ones of the special needs beneficiaries may have been advised to disinherit them – beneficiaries who need their help most – to protect the public benefits. This is seldom the best solution. In fact due to Louisiana’s forced heirship laws, parents cannot disinherit their disabled child. A disabled child of any age must receive the forced portion of their parent’s estate. The best solution is for loved ones to create a special needs trust to hold the inheritance of a special needs beneficiary (including the forced portion). A properly drafted special needs trust will protect public benefits a disabled beneficiary may be receiving, and it will provide for proper care of that individual throughout their lifetime.
Don’t rely on siblings to use their money for the benefit of a special needs beneficiary. Many family members rely on their other children to provide, from their own inheritances, for a child with special needs. This can be a very temporary solution, such as during a brief incapacity, if the other children are financially secure and have money to spare. However, it is not a solution that will protect a child with special needs after the death of the parents or when siblings have their own expenses and financial priorities.
Don’t leave assets to a disabled child’s sibling to “hold” the assets for their benefit. Although you may trust that the “holder” sibling will use the assets for the benefit of your disabled child, unforeseen events may cause a different outcome. For example, the “holder” child may get divorced or run into creditor issues causing the assets to be subject to a community property settlement or a creditor’s claim. Mismanagement of the assets is also a possibility. A special needs trust can help avoid these potential issues.
Don’t procrastinate when planning for a loved one with special needs. None of us know when we may die or become incapacitated. It is important for loved ones with a special needs beneficiary to plan early, just as they should for other dependents such as minor children. However, unlike most other beneficiaries, special needs beneficiaries may never be able to compensate for a failure to plan. Minor beneficiaries without special needs can obtain more resources as they reach adulthood and can work to meet essential needs, but special needs beneficiaries may never have that ability.
Conclusion
A comprehensive plan including a properly drafted and funded special needs trust can ensure that a special needs beneficiary has sufficient assets to care for him or her, in a manner intended by loved ones, throughout the beneficiary’s lifetime. If you have questions about planning for a loved one with special needs, contact Houma elder law attorney, John Sirois. Contact John by phone (985) 580-2520 or by email at john@jsiroislaw.com. Visit John’s website www.LouisianaEstatePlanner.com for more information. To order a copy of John’s book, Louisiana Retirement and Estate Planning, click here.
