Recently, we discussed the initial planning stages for parents of special-needs children. Planning for the future when the parent is no longer around to make decisions is a critical part of the special-needs parents’ role; there are legal, financial, and medical considerations to keep in mind throughout the initial planning process. In this blog post, we’ll discuss the legal planning portion in more detail, particularly about wills and legal guardians for the children when the parents are no longer alive.
Legal Planning for a Child with Special Needs
During the planning process to protect the financial support and safety of special-needs children after their parents are no longer there to make decisions, legal issues form some of the most important parts. In legal planning, there are four major legal issues to consider. These are:
Wills – a will is a legal document that states how a person wants his or her assets distributed after death. A will is prepared by a lawyer and after the person dies, it goes through a lengthy process called probate. Once the probate court has completed its scrutiny of the document and its instructions, assets can be awarded to beneficiaries.
Guardians – guardians are those appointed by the special-needs child’s parents to make decisions on behalf of the parents if they should die. Guardians are sometimes referred to as conservators. A guardian is not necessarily a beneficiary or trustee of financial assets, although some guardians can be appointed to both roles.
Special Needs Trusts – this is a special kind of legal arrangement where assets set aside to care for special-needs children are in a trust. A trust is a legal entity, almost like a corporation, that receives and manages the financial assets on behalf of an individual. Trusts offer important protections that wills or other final-wishes arrangements simply cannot provide.
Letters of Intent – this is an important companion document to a will or a special needs trust. The letter of intent, sometimes referred to as a letter of instruction, provides guidelines for trustees or beneficiaries. In short, it spells out the wishes of the deceased, and in this case, provides a blueprint for taking care of the special-needs child or children.
It is these last two issues that are of primary concern, as it is possible that once special-needs children reach adulthood, the parents may lose some or all authority to make decisions on their behalf. Special needs trusts and letters of intent perform vital legal roles, as they protect the parents’ ability to make important decisions, even after they have passed away.
Before moving on to the discussion of wills, there are two other legal documents that may be of use when planning for the future care and support of special-needs children. These are:
Powers of Attorney – a power of attorney is a legal document that grants decision-making authority on a person or people named in the document. The designated person or people may make financial, legal, or property decisions on behalf of the “initiator”, or the person who originally executes the document. Powers of attorney only apply while the initiator is alive; it becomes null and void the moment the initiator dies.
Medical Directives – a medical directive is a legal document that appoints another person (the proxy) to make healthcare decisions on behalf of the person who executes the document. If the initiator becomes incapacitated or can no longer make important medical decisions, the proxy steps in to help. A medical directive also details the specific medical care and treatments the initiator wishes to receive should he or she become unable to make decisions on his/her own.
Planning with Wills
A will, sometimes referred to by its formal name as a will and testament, is a legal document that states the actions a person wishes to have conducted when he or she passes away. Wills serve to distribute the deceased person’s estate assets, such as financial assets, property, and valuables, and to establish guardianship of minor children or children with special needs.
When a person dies, the will goes through a process called probate. During probate, creditors are notified of the person’s death in order to allow them to make claims against the estate. Once probate is completed, the probate court allows the wishes and instructions in the will to be carried out by its executor(s). Probate can take months to complete, and it can also require substantial court fees.
With wills, many parents run into issues. In particular, inheritances or gifts exceeding a value of $2000 made to a special-needs child may disqualify that child from receiving government benefits such as Social Security supplements and Medicaid benefits.
Not having a will in place is another consideration. If a person dies without leaving a will, the state will decide who receives property and financial assets as well as who becomes the guardian of minor children or special-needs children.
When planning for special-needs children after you have passed away, guardians demand extra consideration. A guardian must be capable of making important decisions on your behalf to benefit the special-needs child. This can even mean very tough decisions such as those involved with medical care or financial assets. Each state has specific laws about guardians or conservators, but the key consideration is this: the guardian is the person who will manage the care of your child and his or her unique needs after you die. There are two major types of guardianships to consider:
Limited Guardianship or Conservatorship – in this type, the powers of the guardian or conservator are limited. In other words, their decision-making powers will reflect only the needs of the child or children they are tasked with taking care of. This type of guardianship is common where the special-needs child is capable of performing some (but not all) of the basic daily living tasks as well as being able to handle some of their own finances.
In a General Guardianship or Conservatorship, the guardian or conservator has full and complete decision-making authority for the individuals under their care. This includes finances, living arrangements, medical treatments, and many other aspects. Obviously, this type is required when the disabled or special-needs individual is not capable of daily living tasks or financial decisions.
Legal planning for a special-needs child is a complex and challenging process. Seek the help of a qualified family attorney to help you through this process. With an attorney’s assistance, you can rest easy knowing that your children’s needs will be managed long after you are gone.