3 Costly Mistakes Made By Most Families With Special Needs Children

As a Peninsula estate planning attorney, I know families with special needs children have unique planning requirements. Unfortunately there are many misconceptions when it comes to securing the financial future your child deserves.  Even well-meaning caregivers and service organizations don’t understand issues and can give bad advice. It is really critical for these families to fully understand their options because these misconceptions can result in costly mistakes. Below are just a few.

COSTLY MISTAKE #1: Disinheriting your child to preserve government benefits.

Many children and adults with special needs rely on government benefits such as SSI and Medicaid for their basic needs (including health insurance).  There are some who would suggest that you disinherit your child to protect his or her benefits. But government benefits provide only enough to secure food and shelter.  So what happens after you become incapacitated or pass away?  Will your child be able to maintain the life that you have so carefully crafted for them?  Probably not.

If your child is likely to require government assistance to meet his or her basic needs, you should consider establishing a Special Needs Trust.  If done properly, a Special Needs Trust can protect your child’s public benefits and help them maintain their lifestyle even after you are no longer there to support them.

COSTLY MISTAKE #2: Procrastination.

It is critical that all parents with minor children do estate planning.  You just never know when you might become incapacitated or die.  But, it is doubly critical that parents of special needs kids plan early.  That is because a child without special needs will be able to work and provide for their own financial well-being when they become adults.  However, your special needs child may never be able to do that. Plan early because your failure to properly plan for them can never be undone.

COSTLY MISTAKE #3: Creating a “DIY” or generic special needs trust.

A special needs trust must be created by an attorney who has expertise in this area of the law.  It is possible to create a DIY or generic trust that can protect your child’s government benefits, but most likely they are not designed to meet your child’s particular needs. It is critical to design a trust that will ensure that your child’s specific requirements are considered.  For example, your child may require, or greatly benefit from, special group programs, individualized physical therapy, or other things that a generic trust simply doesn’t address.

A properly drafted and funded Special Needs Trust can ensure that your child has sufficient assets to care for them in the way you plan throughout their lifetime. But be sure to see an experienced attorney before relying blindly on what others may be telling you.