Magazine article The Exceptional Parent

A Three - Part Plan: Each Part of the Plan Plays a Distinct and Important Role in the Care of a Child with a Physical, Mental or Emotional Disability

Magazine article The Exceptional Parent

A Three - Part Plan: Each Part of the Plan Plays a Distinct and Important Role in the Care of a Child with a Physical, Mental or Emotional Disability

Article excerpt

For many families with a special needs child, no matter what his or her age, the questions concerning who will take care of the child in the future and the source of the money to support that child, are daunting thoughts. Some choose to postpone planning rather than address the difficult reality that faces them. However, early, careful planning can secure a disabled child's future, long after his or her parents are no longer around.

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There are three important parts of a comprehensive plan that parents should consider setting up or preparing:

* A Supplemental or Special Needs Trust;

* Guardianship (including those over age 18);

* A Family Love Letter or Letter of Intent.

Each plays a distinct role in the care of a child with a physical, mental or emotional disability. The following is a brief overview of each:

THE SUPPLEMENTAL OR SPECIAL NEEDS TRUST

Parents and grandparents who continually put money and other assets in the name of a child with a disability, even as part of a jointly held account, actually may be doing a disservice to that child. By having such funds in their name, a child with a disability is actually precluded from receiving means based government entitlements, such as Medicaid and Supplemental Security Income (SSI). By contrast, completely disinheriting the child, and relying solely on the government, is not necessary and hardly qualifies as sound planning.

Smart and proper planning is best accomplished by creating a plan that includes full eligibility for the government assistance, while also providing whatever private resources the family can leave for their family member. This "best of both worlds" approach is accomplished through the creation and use of a Supplemental or Special Needs Trust.

The Supplemental or Special Needs Trust is often referred to as the cornerstone and most important tool in formulating a plan to care for a special needs child. It is typically created as part of a comprehensive estate plan and funded with an inheritance and/or life insurance products, such as a second to die policy. If drafted correctly, the assets that fund the Trust, provide for the "extras" for the beneficiary (the child with a disability) without affecting or disqualifying the child from those important government programs. The child retains the right to receive these means based benefits, as this type of Trust is not considered a countable resource by the government.

"My Mom had put off preparing a Will and setting up a Trust because of the considerable expense and the emotions this type of planning brings," shared Denise Vargas, a young woman with a disability who graduated from the Henry Viscardi School at The Viscardi Center, an accredited model school serving Pre-K through High School students with severe physical disabilities, and is now the president of the Viscardi Alumni group.

Vargas explained why they decided to move forward with establishing the Trust, "We needed to ensure that I would still be able to maintain the 24/7 care that I currently receive in the future and that I would also not lose the government assistance I am entitled to. Our attorney explained all of our options in language we could understand and, having a child with a disability himself, could relate to the concerns and needs we had. Thanks to his solid guidance, the process went quicker than we had planned and my Mom is much more at ease."

Once the Trust is created, it is managed by a person known as a Trustee, usually someone similar in age to the individual with a disability. There are also organizations and institutions which provide Trustee services. It should also be noted that special rules apply (which require payback to the State at the conclusion of the disabled individual's life) if the Trust is funded with money or assets of the beneficiary, such as a recovery from a lawsuit or a gift/inheritance directly to the disabled individual from another family member. …

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