3 Estate Planning Tips For Children With Special Needs
Are you working on your estate plan? Thinking about your passing may not be a pleasant exercise, but it's important. Your estate plan dictates how your assets are distributed to your heirs after you pass away. Your children and other heirs may be forced to determine the distribution if you don't have an estate plan. That can lead to chaos, conflict, and unnecessary legal fees. An estate plan is especially important for a child with special needs. Whether grown or not, the child may require special care and assistance. They may not be able to manage a large amount of money. You probably want to leave enough money to provide for the child's care, but you also want to ensure the money is secure and managed carefully. Below are a few tips to consider in your estate planning:
Create a trust and choose the trustee carefully.
A trust is often an effective way to maintain some control over your assets after you pass away. You can use a trust to dictate how the assets should be managed and how they should be distributed to your child for his or her care and support. You'll need to designate a trustee to manage the assets. While you may be tempted to name a family member as a trustee, you also may want to consider a professional like an attorney or an accountant. They're bound by duty to act in your child's best interests and won't let emotion influence their decision-making. You can also designate a loved one as the trustee but with a professional as a special advisor.
Base the inheritance on need, not fairness.
People often divide their assets equally among children to create a sense of fairness. However, that may not be appropriate for a child with special needs. Your child may require care, support, and assistance for the rest of their life. To fund that care, you may need to leave that child with more money than you leave for your other children. If you don't leave enough assets for your special needs child, your other children may have to fund their care later in life. Communicate this with your heirs in advance so they aren't caught off guard after you pass away.
Create a letter of intent.
A letter of intent can be helpful when you have a child with special needs. A letter of intent goes beyond a trust's financial and legal terms. In the letter of intent, you can provide a trustee or caretaker with everything they need to know about your child. It can include details about care, support, the child's emotional needs, and much more. The letter of intent provides valuable context that helps a caretaker better support your child after you're gone.
Ready to start your estate plan? Contact an attorney or accountant today to start the estate planning process.
Share
