Estate planning for parents of typically developing children runs a common course: When the kids are young, parents are concerned about an untimely death. Consequently, they plan in their wills to appoint guardians and set up trusts so that the children won't get their hands on the assets at too young an age. Inheritances are critical if the parents die while the kids are young. But once the kids are grown, they become independent, and an inheritance stops being critical, and starts being something nice that nobody is depending upon.



With special needs children, estate planning is very different. Yes, the children are dependent upon the parents and an inheritance when they are young, but very often the age of independence never happens, and an inheritance is critical throughout the special needs child's lifetime. The child is often dependent on the parents for as long as the parent lives, and is dependent upon an inheritance in order to flourish once the parents are gone.

Here are five things to be aware of in special needs planning:

1. Get a will completed. A will is a written expression of your intentions with regard to your estate. Within your will you establish who the executor will be, who is the person who will handle setting up your estate. You also designate who your heirs are in your will, how much they will receive and how they will receive it. Additionally, a will is where you designate guardians for your children. Although guardian designations usually end when a child turns 18, there is nothing stopping you from designating guardians for special needs children over the age of 18.

2.Complete a LifeCare plan. This is a document in which you put in writing all the information that would need to be passed on to caregivers in the future. What are your child's likes and dislikes, hobbies, what treatments have worked and what has not, what religious/values issues are important, and who are the people who treat and help your child now. You have a lot of information in your head ... it's time to commit it to paper.

3.Consider establishing a special needs trust. A special needs trust can either be testamentary (in your will and established when you die) or "living" (established now while you're alive). Assets can be placed in a special needs trust for the benefit of a special needs child, for extra, supplemental expenses above and beyond what government benefits they receive, and is important because inheritances jeopardize SSI and other needs-based programs.

4.Purchase a life insurance policy. Life insurance is the single best way to provide a pool of money for your special needs child after you die. The costs of taking care of a special needs child may very well exceed whatever you have to give the child. A life insurance policy provides a pool of money for their lifetime.

5.Hire good advisors. Critical to the completion of a good special needs plan is a good special needs planning attorney and a financial advisor who is well-versed in special needs planning. Be picky!

Copyright (c) 2008 Mark Albertson