John H. Ruby Child Support Law Blog on Lawyers.com

Estate Plans for People with Special Needs

Parents of children with special needs may need to prepare for the day when they will not be around to provide care and support.  The case of children with special needs is complicated, legally, by stipulations about receiving government assistance.

Typically, children with special needs qualify to receive monthly federal support from Supplementary Security Income (SSI).  In order to receive such support, however, a disabled adult cannot posses more than $2,000 in assets in their name (excluding car, house, and personal items). Therefore, parents wishing to create an estate plan that cares for their disabled child will, in many cases, need to find a means of transfer that will not jeopardize government assistance.

As an alternative to leaving assets in the name of a disabled child, parents may decide that the next best option is to transfer assets to a close relative, such as a sibling.  However, there is considerable risk in following this path because the relative cannot be made legally obligated to use the money for the disabled child.  Furthermore, there is the possibility that the money would be passed elsewhere if the relative passes away before the disabled child.

Special needs trusts

A Louisville trust fund provides a legal mechanism for parents and family members to contribute funds for the benefit of the disabled child without jeopardizing government assistance.  Special needs trusts require using very specific language in the trust document detailing how funds are to be administered by the trustee.  As with other types of trust funds in Louisville, the choice of a trustee is an important one, as this person or institution will have considerable control over the assets in the trust.
Once a special needs trust has been created, all relatives naming the child with special needs as a beneficiary should be informed that their assets must be transferred only through the special needs trust.

Other legal tools

Living wills, advanced medical directives and powers of attorney are legal documents that express your wishes or allow others to act on your behalf when you are incapacitated or unable to attend to your affairs.  By legally preparing for unexpected medical situations, you will help avoid uncertainty, confusion, and potential strife regarding the type of healthcare you wish to receive.

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John H. Ruby & Associates
2950 Breckenridge Lane, Suite 13
Louisville KY 40220
888-314-8437