All children are a blessing. From the day they are born, you begin making plans to ensure that
your child or grandchild has a bright future. What will their interests be? What job will they have?
Who will they marry? While these are common concerns for most families, for those with a
special needs child or grandchild, taking steps to ensure they have a safe, happy, and healthy
future is even more important due to the additional hurdles they may face. To help provide a
prosperous future for your special needs child or grandchild, we suggest the following steps:

Have a Special/Supplemental Needs Trust Prepared
One of the first things you can do in your estate planning is establish a special or supplemental
needs trust (SNT) for the benefit of your child or grandchild. An SNT is a special type of trust
designed to set aside money and property for the benefit of a beneficiary who may qualify for
public assistance for medical and other care expenses as a result of his or her disabilities. This
type of trust can be added to an existing trust, or it can be drafted as a standalone trust.

Because most government programs providing aid to disabled individuals have strict
requirements about how much money and property a person can own and how much money
they can receive on a regular basis, it is important to make sure that any inheritance your
special needs child or grandchild receives is structured in a way that will not disqualify them
from receiving the government benefits. Even if your child or grandchild is not currently
receiving government benefits, this does not mean that they will never receive them. When
planning for their future, we want to make sure that we are maximizing all opportunities
available to them, not limiting those opportunities. To accomplish this, it is crucial that the trust
be carefully drafted by an attorney who is familiar with the eligibility requirements for
government benefits.

In addition to providing for your child’s or grandchild’s financial future, an SNT allows you to
appoint a care manager or an advisory committee. As opposed to a trustee, whose job is to
manage the money and property in the trust and make distributions, the care manager acts as
your child’s or grandchild’s advocate. Depending upon the level of care your child or grandchild
needs, the care manager may only need to check on them periodically or may be responsible
for their day-to-day care. For those needing more assistance, the care manager may also serve
as part of an advisory committee made up of multiple friends, family, and/or professionals. As
an advocate, the care manager or advisory committee can advise the trustee about the
beneficiary’s needs and the best ways to use the funds.

Within the SNT, a statement of intent can be included to instruct the trustee, and if necessary,
the court, as to why the trust was established and how the money and property should be used.
Although your intentions may seem obvious, including this section in the SNT can act as a
safety net should there be a change in the law causing the special needs beneficiary to become
ineligible for government benefits. If you include a statement of intent, it can be easier to change
the trust to ensure that your original objective is carried out after you have passed away in the
event of unforeseen changes.

Write Down Your Instructions
In addition to creating an SNT, writing a letter or memorandum of intent can provide excellent
instructions to the trustee you choose about what is to happen after you have passed. Although
this document is not legally binding, it can give your trustee insight into your true intentions. You
can include instructions regarding the types of things you want the money to be used for (so
long as they are allowable under the various government rules), milestones you would like to
see the beneficiary achieve, and the standard of living you would like the beneficiary to have.

Consider Life Insurance to Provide the Necessary Funds
Supporting a special needs child or grandchild can be expensive. While you are working or have
a stream of income, you can allocate money as you see fit. However, not everyone has enough
of a nest egg to continue covering these expenses for their special needs child or grandchild
once they have passed away. By purchasing life insurance and naming the SNT as the
beneficiary, you can guarantee that there will be sufficient money at the trustee’s disposal to
care for your child or grandchild. Life insurance can be an attractive option because it is paid out
as a lump sum and does not have the same income tax liabilities as retirement accounts.

Review Your Retirement Accounts
With the passage of the SECURE Act, most beneficiaries lost the ability to stretch distributions
from an inherited IRA over their life expectancies. However, Congress created a new class of
beneficiaries called “eligible designated beneficiaries,” which includes disabled beneficiaries.
These beneficiaries retain the ability to receive distributions over their life expectancies,
reducing the amount of income tax due when those distributions are made. Congress also
passed additional rules allowing the disabled beneficiary’s life expectancy to be used for certain
types of trusts. If you have a large retirement account, it is very important that we meet to
discuss ways this money can be distributed after your death to maximize its benefits to all of
your beneficiaries.

Give Us a Call
Ensuring that your special needs child or grandchild is cared for after you are gone is likely a top
priority for you. Our priority is to assist you in crafting a plan that will ensure continued support
and prosperity for your loved ones. Call us today to schedule your appointment.