Special Needs & Estate Planning: What To Know

Estate planning can be a helpful tool for families planning for the future. And increasingly, many families that have children with special needs have focused on creating long-term financial plans for their entire family.

But as with any estate plan, there are a lot of options to consider. That's why it's essential to identify your specific needs and which estate planning options can help you best achieve your goals.

Below, you can learn about some estate planning options for families that have children or adults with special needs. And if you have a specific question, an estate planning lawyer at the Law Firm of Brown & Jensen can advise you on different strategies to address your specific concerns.

There are an increasing number of children and adults with special needs

The number of children with disabilities in the United States continues to increase consistently every year. In the past decade alone, the number of children under 18 with disabilities has risen from 3.9 percent in 2008 to 4.3 percent in 2019, according to the U.S. Census Bureau.

In addition, the average life expectancy for many adults with disabilities has also increased. For example, an adult with Down syndrome can expect to live to 60. In contrast, four decades ago, the average life expectancy for someone with Down syndrome was 28.

Common issues that need to be addressed

One of the most critical issues families need to consider if they have a child with a special need or disability is who will care for their child if they outlive the parents. In many cases, adults with certain disabilities or special needs require 24-hour care in specialized facilities.

Specialized care and support can be expensive, and the demand for programs or facilities that provide such care has increased dramatically in recent years. That's why families must have a detailed estate plan that addresses these issues and concerns.

Why you should start planning early

The best advice estate planners give families who have children with special needs is the same advice they give to any family – start planning early. Even if your children are still very young, creating a detailed, long-term estate plan for your child with special needs will likely take longer than you expect.

By starting early, you can also have a better idea of how to pay for such a plan in the future. For example, depending on your family's financial situation, your child may qualify for Medicaid or Supplemental Security Income (SSI) as an adult with a disability or special need.

Other times, your family may need to explore other funding options for specific situations, such as long-term residential facilities for adults with special needs. And even if you have the financial resources, space can be limited in these types of facilities.

Understanding Special Needs Trusts

One of the best ways parents can plan for the future if they have a child with a disability or special need is to create a Special Need Trust (SNT). By creating an SNT, parents can set aside money for their children during their lifetime.

Often, there are certain tax advantages to creating an SNT. And in many cases, adults with a disability still qualify to receive financial aid from the government (Medicaid and SSI benefits, for example) even if they also have an SNT.

Along with Special Need Trusts, there are often many other estate planning options for families with children or adults with special needs, including:

• Establish a federally authorized and tax-advantaged Achieving a Better Life Experience (ABLE) account or a group trust run by a nonprofit.
• Create a full discretionary trust, especially if an adult with a disability has a job but does not have enough money to pay for their long-term living expenses.

How an estate planning lawyer can help you

Parents have a lot of choices when deciding how to care long-term for a child or adult with special needs. Unfortunately, making sense of all the options can be overwhelming. That's why our experienced estate planning attorneys want to help.

At the Law Firm of Brown & Jensen, we are well-versed in the state and federal laws that apply to estate planning in Arizona. Depending on your family's specific situation, we can also explain the tax implications of different estate planning options.

Contact us to learn more about your potential options. We have eight offices throughout Arizona, including locations in Mesa, Tucson, and Scottsdale.