March 02, 2011

Special Families Need Special Estate Planning: Top 4 Reasons to Create a Special Needs Plan

By Evan H. Farr, Certified Elder Law Attorney

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As an Elder Law and Estate Planning Attorney who has served hundreds of disabled clients and special needs families in the D.C. Metro area for more than 20 years, I still regularly meet families who, for one reason or another, are not aware of a key service – “Special Needs Planning” – a specialized form of estate planning designed the achieve unique goals and objectives they need. With the opening of the new respite center – Jill’s House – I am reminded of how important it is for these brave families to have a fiscal direction . . . a reasoned understanding of their financial options.

According to the American Psychological Association, there are over 35 million men and women in the U.S. with a developmentally, physically, and/or behaviorally disabled child. I know and understand the lengths it takes to obtain government benefits for my clients, both young and old; my practice has always been dedicated to planning for the financial futures of families from all walks of life, including those families with special needs children. If you are part of a special needs family, here are the top four reasons to consider making a special needs plan:

Reason 1: Avoid Inadvertent Disqualification of Your Child from Public Benefits

Many special needs children are entitled to important public benefits, but proper planning is required if you wish give your child the benefit of your own funds without sacrificing eligibility. One way to plan for your child’s future is with a “special needs trust.”

Reason 2: There are Ways to Secure Your Family’s Future Despite High Expenses

A special needs trust is an essential tool to protect a disabled individual’s financial future. Also known as “a supplemental needs trust,” this type of trust preserves eligibility for federal and state benefits by keeping assets out of the disabled person’s name.

Parents of special needs children often feel both stressed and blessed. Luckily, there are ways to specifically and effectively address and plan your family’s financial path, while taking into account the desired lifestyles for you and your spouse, your healthy children, and of course, your disabled child.

Reason 3: You Shouldn’t Place an Unfair Burden on Your Other Children

If you have other children, proper planning can ensure these siblings are not over-burdened with caring for the disabled sibling in the future. A common mistake is to assume that your healthy children will always be able to care for your special needs child, but life’s “what-if’s” should always be considered when planning for the future.

Reason 4: You Need an Experienced Lawyer to Select Child’s Trustee

Choosing a trustee is one of the most difficult parts of planning for a child with special needs. The trustee of a special needs trust must be professionally competent and able to remain sensitive to the needs of the special beneficiary. A trustee of a normal trust is tasked with professional duties: including accounting, distributions, investment decisions, and tax returns. In addition to these duties, a trustee of a special needs trust must remain sensitive to the beneficiaries’ needs.

For many special needs families, hiring a professional trustee cannot be justified unless there is at least $500,000 in assets in the trust. One solution is to use a family member trustee who may then hire professional accountants, lawyers, and investment advisors to fulfill the professional duties. A second solution is a “pooled trust.”

Two online sources to find qualified Special Needs Planning Attorneys are the National Academy of Elder Law Attorneys and the Academy of Special Needs Planners.

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About Evan H. Farr, Certified Elder Law Attorney

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Evan H. Farr, CELA, is one of the leading Elder Law and Special Needs Planning Attorneys in Virginia and top Medicaid Asset Protection experts in the U.S. Evan has more than 23 years of experience creating, updating and modifying
detailed and complex trusts to plan for complicated circumstances, and dedicates a large part of his practice to planning for special needs families. Virginia has no procedure for approving certifying organizations. You can
schedule a meeting or sign up for a seminar with Mr. Farr by calling 703-691-1888, or online via www.VirgniaElderLaw.com. The Farr Law Firm is located at 10640 Main St., Suite 200, Fairfax, VA.

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