February 29, 2008

Planning for "Special Needs" Dependents

Maybe you have a "special needs" child or know of a family member who does. If so, ask yourself what will happen to that adolescent or adult handicapped individual when you are no longer available to help him/her, both financially or emotionally. Will your state resources be adequate? Will your child be institutionalized?

Families that include a member with a physical or mental disability have special needs to consider when organizing their financial and estate planning. Long term solutions need to be considered if you should die and no longer can provide for your loved ones.

** Who will care for your childs basic needs, food, clothing and living arrangements?
** Who will provide emotional support?
** Have you provided for adequate financial resources for other family members or caregivers?

A Special Needs Trust may be the best solution. It will provide security, while allowing him or her to qualify for government benefits. The Special Needs Trust can be established and funded during the parents life, or established by will (a testamentary trust) to receive assets from your estate.

Typical assets placed in a Special Needs Trust include a life insurance policy, the death benefit from a life insurance policy or other income producing assets such as stocks and bonds. Insurance is the most widely used funding method as it does not require a trustee to manage a stock or bond portfolio and provides for immediate access to assets.

The first step is to review your financial/legal situation and make sure that your special needs child is taken care of and protected. For insurance planning, contact