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Serving Philadelphia, Delaware County, Montgomery County, Bucks County and Chester County since 1996.
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Plans of Care and Life Insurance
When planning for disabled children, plans of care, life insurance, and special needs trusts are all important tools.
The following sections describe the uses of the first two of these.
Plans of Care
Where is your disabled child going to live when he or she can no longer live with you?
Will he or she move in with a sibling? Or into a group home?
Who will make the decision? Who will monitor the care he or she receives?
It’s never too soon to begin answering these questions and making sure that the living and support arrangements are in place.
In some cases, it can ease the transition for all concerned if the child moves to the new living arrangement while his parents
can still help with the process. Non-profit organizations and private consultants may be able to help set up the plan,
research available options, and assist in the move.
It will help everyone involved if the parents create a written statement of their wishes for their child’s care.
They know him or her better than anyone else.
They can explain what helps, what hurts, what scares their child (who, of course, is an adult), and what reassures him or her.
When the parents are gone, their knowledge will go with them unless they pass it on.
In almost all cases where a parent will leave funds at death to a disabled child, this should be done in the form of a trust.
Trusts set up for the care of a disabled child generally are called "special”, or
“supplemental" needs trusts.
Money should not go outright to the child, both because he or she may not be able to manage it properly and because receiving the
funds directly may cause the child to lose public benefits, such as Supplemental Security Income (SSI) and Medicaid.
Often, these programs also serve as the entry point for receiving vital community support services.
It is extremely important that the parents of a disabled child create a special or supplemental needs trust as part of
their estate plan.
Some parents choose to avoid the complication of a trust by leaving their estates to one or more of their healthy children,
relying on them to use the funds for the benefit of their disabled siblings.
Except in the case of a very small estate, this is generally not a good idea.
It puts the healthy child in the difficult position of having to decide how much money to spend on the sibling.
Such funds also will be subject to claim by creditors of the healthy child and at risk in the event of divorce or bankruptcy.
Finally, the child who receives the funds may die before the disabled child without setting these funds aside in his or her
estate plan.
Life Insurance
A parent with a disabled child should consider buying life insurance to fund the special needs trust set up for the child’s support.
What may look like a substantial sum to leave in trust today may run out after several years of paying for care that the parent
had previously provided.
The more resources available, the better the support that can be provided the child. And if both parents are alive, the cost
of "second-to-die" insurance — payable only when the second of the two parents passes away — can be surprisingly low.
The good news is that advance planning for a disabled child can make a significant difference in his or her life.
You just have to take the first step.
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Call Us: (610) 446-9626
Fax Us: (610) 446-9985 |
Visit our offices:
17 Mifflin Ave. Suite 202
Havertown, PA 19083 |
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