When it comes to caring for a child with special needs, Tennessee parents are faced with a unique set of challenges. Beyond day-to-day considerations, one looming question is: what will happen when I’m no longer here? Through intentional estate planning, you can ensure your child continues to receive the care and support they need, long after you’re gone. Here’s how estate planning can play a crucial role in safeguarding the future of your child with special needs.
Special Needs Trusts
One of the primary estate planning tools for families with children with special needs is the Special Needs Trust. This trust is designed specifically to support individuals with disabilities so that an inheritance doesn’t jeopardize their benefit eligibility. Funds in a Special Needs Trust are not considered assets for the beneficiary, meaning they won’t be disqualified from receiving government assistance such as TennCare/Medicaid or Supplemental Security Income (SSI).
Guardianship Nominations
In the event of your untimely death or incapacity, you’ll want to ensure that your child is cared for by someone you trust. Within your will, you can nominate a legal guardian who shares your values and understands the unique needs of your child. One common misconception, though, is that a guardian nomination in an estate plan is absolute. If a minor child’s parents pass away, the appointment of their new guardian is a serious matter. In Tennessee, this role is decided in either Chancery Court, Circuit Court, or Juvenile Court, where the judge will do their due diligence to ensure this decision is made in the best interest of the child. Therefore, your guardian nomination in your estate plan will go a long way, but there will be additional qualifications that your nominee must have, such as a clean criminal record, no history of drug abuse, and financial stability, to name a few.
Letter of Intent or Instruction
A Letter of Intent isn’t a legally binding document but serves as an invaluable guide for future caregivers. In this letter, you can provide detailed information about your child’s routine, preferences, medical needs, and other pertinent details to ensure continuity of care for your child. For example, if you wish for your child to attend a certain private school or participate in certain activities as they are growing up, this Letter gives guidance to the caregiver to let them know what your wishes are in raising your child.
Life Insurance
A life insurance policy can be tailored to provide for the future needs of your child. But be careful when naming beneficiaries. Should you name your child as the beneficiary of such a policy, then when you pass away, your child would likely have to come off any government benefits they were otherwise receiving. While you would not want to name your special needs child as the direct beneficiary of a life insurance policy, you can name a Special Needs Trust as the beneficiary. Designating the Special Needs Trust as the beneficiary can help ensure that the proceeds are used appropriately for your child’s care, without risking any government assistance benefit eligibility.
ABLE Accounts
Achieving a Better Life Experience (ABLE) accounts allow individuals with disabilities to save money without risking their eligibility for government benefits. These accounts and run by the State of Tennessee and the funds can be used for various purposes, including education, housing, and health care. Integrating ABLE accounts into your estate plan can offer additional financial flexibility for your child. The downside is that there is a lifetime limit of $350,000 that can be placed in an ABLE account.
Family Education
It’s crucial that all family members understand the intricacies of estate planning for a child with special needs. If a well-meaning relative leaves money or assets directly to your child, it could inadvertently disqualify them from vital government benefits. Educate family members about the importance of gifting to the Special Needs Trust instead.
Periodic Review and Updates
As with all estate plans, it’s essential to review and update your arrangements regularly. Changes in laws, family circumstances, or your child’s needs can affect the efficacy of your current plan. Regular check-ins with an estate planning attorney experienced in creating Special Needs Trusts can ensure that your plan remains up-to-date and effective.
Putting It All Together
Estate planning is more than just preparing for the inevitable. It’s about crafting a roadmap for the future, ensuring that our loved ones are cared for in the best way possible. For parents of children with special needs, this responsibility feels even more pronounced. By leveraging tools like a Special Needs Trust and collaborating with knowledgeable professionals, you can create a secure and loving future for your child.
Remember, it’s never too early to start planning. The peace of mind that comes from knowing your child’s future is protected is truly invaluable. If you would like to learn more about creating an estate plan for you and your family, contact Crow Estate Planning and Probate today by calling 615-558-8002 to schedule a free consultation. Our attorneys are experienced in creating Special Needs Trusts to ensure that your legacy is protected, and so is your child’s future.