In general, estate planning is a good idea for everyone. It helps address questions regarding who handles your affairs if you lose capacity, as well as the orderly transfer of assets, wealth preservation and taxation. Estate planning ensures your wishes are carried out precisely and by people you trust. When undertaken for or by individuals with a disability or special need, however, estate planning takes on an extra level of importance when it comes to ensuring their future security and quality of life.
“Estate planning” isn’t just about the legal process of establishing a will or a trust. It encompasses a wide range of considerations and steps. When done well, it often relieves much of the stress and worry about the various “what ifs.” When designing an estate plan that is intended to benefit a loved one with special needs, it helps to think holistically and call on your deep understanding and appreciation of their needs and wants.
Before you launch into complex legal considerations, a good first step is to start with the basics and envision the best future life for the individual for whom you are planning. What will their daily life look like? Will they be working, attending school, or living away from home? To the extent possible, that individual’s input is an essential part of the planning process. There are also special considerations you should keep in mind if they are approaching or are over the age of 18.
If you’re like many individuals leading busy, hectic lives, one of the biggest challenges will be getting organized. For comprehensive planning and decision-making, you should try to keep everything in one place – personal, medical, and financial information. This likely will take considerable time, so it is never too early to start getting organized. The key is to have a single, dedicated receptacle such as an accordion file for hard copies, kept in a secure location, and/or a computer folder that is appropriately organized, inventoried and able to be accessed only by persons you trust.
Of course, a key consideration may be preserving an individual’s needs-based public benefits. How do you pass property such as a home, vehicle, life insurance, investments, or cash to a loved one with special needs who is receiving government assistance? Medicaid and Supplemental Security Income have strict rules relating to financial eligibility, including income and resources, and one misguided financial decision as part of an estate plan could deprive someone of much needed services. One option is a third-party special needs trust that can help individuals balance eligibility for public benefits while providing a source of funds for extras that enhance one’s quality of life. Another planning option that may be available is an ABLE (Achieving a Better Life Experience) account. An ABLE account is a non-taxable investment account that can be maintained for the benefit of the individual who developed a disability prior to age 26, without interfering with eligibility for federal needs-based benefits. It offers spending flexibility for a wide variety of needs. (Note: In New Hampshire, the ABLE Account program is referred to as a STABLE Account.)
As part of the initial planning process, if you are a parent of an individual with special needs, you may also want to consider drafting a letter of intent. This is your own personal set of guidelines, important information, and instructions for how best to care for your child and to give the reader insight only you can provide. A letter of intent is a “living” document that will change as your child ages, so it should be updated regularly. (Learn more about how to write a letter of intent and what areas should be covered.)
You don’t know what you don’t know. Effective estate planning must address a number of factors and variables. Consulting with an attorney knowledgeable in special needs estate planning can help get you on the right track to assuring a secure future for your loved one.