Special Needs Planning
A child with special needs brings many changes to a family. Parents embark on this unplanned and often daunting journey with no real sense of what the future holds for their child. However, parents can make some plans for their child’s future by engaging in special needs planning.
When engaging in this type of planning for your child, you need the assistance of a law firm that fully understands the issues that affect individuals with special needs and how best to handle those issues. You will find this level of knowledge, expertise, and compassion when you speak with a special needs trust attorney at Rubin Law. Contact us by calling 866-TO-RUBIN and scheduling a time to meet with us about the special needs planning that would best benefit your family.
Achieving Your Goals Through Special Needs Planning
Special needs planning is a unique area of the law that takes into account many factors that most families may not even consider. As a result, you potentially must begin much sooner and make legal and financial arrangements for a much longer period when you plan for your child with special needs. You also must consider various federal and state laws and regulations that may impact your child’s life.
Special needs planning aims to ensure that your child with special needs is safe, happy, and healthy. In addition, you want to ensure that your child receives the best medical care possible, lives in the environment that best meets their needs, and has sufficient financial resources to pay for necessary living expenses. You also want to meet your child’s emotional needs by surrounding them with people who can provide love, care, and affection in your absence.
Financial Planning for Your Child with Special Needs
One major aspect of special needs planning involves financial support for your child. You must be aware of the effects of financial support from family members on your child’s eligibility for public benefits such as Social Security, Medicaid, and more. These benefits have different criteria and factors to consider when your child is a minor and an adult. Assets belonging to your child also may have tax consequences and trigger state Medicaid “payback” provisions after your child’s death if you do not carefully structure financial support to avoid these potentially adverse implications. A special needs trust attorney can assist you in drafting the legal documents necessary to address all these concerns.
First-Party or Self-Funded Special Needs Trusts
First-party or self-funded special needs trusts typically contain assets that belong to the child. For instance, if a child receives a settlement from a medical malpractice or personal injury lawsuit, the funds can go into this type of trust. For tax purposes, these trusts disregarded as an entity, so funds are taxed at the lower individual rather than the higher trust tax rate.
Third-Party Special Needs Trusts
The third-party special needs trust is usually a fundamental part of special needs planning. Parents often use these trusts to leave an inheritance to their child. These trusts allow your child to have access to funds for necessary expenses that add to their quality of life without endangering their eligibility for public benefits. As distributions are made for the benefit of the child, they may cause taxable income to be taxed at the child’s tax rates, which are generally lower than the trust’s tax rate. Furthermore, there are ways to minimize the child’s tax liability. The trust can also pay the child’s taxes out of trust assets.
Testamentary vs. Free-Standing Special Needs Trusts
Parents also can create a special needs trust as a testamentary trust. For instance, their wills can provide that certain assets go into a special needs trust to benefit their child to be established upon passing of both parents.
Another option is for parents to create a special needs trust during their lifetime or a “free-standing” special needs trust. This type of trust allows other family members, such as grandparents, aunts, uncles, and siblings to contribute to the trust if they wish. There are many additional reasons that this type of trust is generally preferable to a testamentary special needs trusts.
Estate Planning
You may need guidance on creating an estate plan for your family that will best provide support for your child with special needs. We can advise you about estate taxes, probate avoidance, income tax considerations, changes in beneficiary designations, and other techniques to make your estate plan work for you. Together, we can create the estate plan that is best calculated to meet your goals while still caring for your child with special needs.
Designating Others to Care for Your Child When You Are Unable to Do So
As the parents of a child with special needs, you also need to consider what happens if you can no longer care for your child due to incapacity, death, or another reason. You can engage in special needs planning that specifically addresses this situation.
Some legal documents to consider concerning your child’s care can include:
- Guardianships and alternatives to guardianships
- Short-term guardian declarations
- Powers of attorney
- Letters of intent
You likely are the best source for choosing people to care for your child (or oversee the support system that your child will need to live full, safe, and happy life after you are gone or become incapacitated. While no one enjoys thinking about these possibilities, making these hard decisions now can avoid a great deal of upheaval, uncertainty, and stress for your child and your family in the future.
Meeting Your Child’s Other Future Needs
You also may need to consider how to meet your child’s educational, residential, social, and emotional needs, both now and in the future. To that end, we can discuss and provide you with guidance on:
- Special education issues
- Assisting your child with choices under the Illinois Health Surrogate Act
- Residential and day programs
- The impact of other situations on your child’s public benefits, such as lawsuit settlements, divorce, and more
Call Rubin Law to Reach a Special Needs Trust Attorney Today
Rubin Law is the only law firm in Illinois exclusively limited to providing compassionate special needs legal and future planning to guide our fellow Illinois families of children and adults with intellectual disabilities, developmental disabilities, or mental illness down the road to peace of mind. For more information, email a special needs trust attorney at email@rubinlaw.com or call 866-TO-RUBIN.
