Special Needs Planning Mistakes

Special needs or supplemental needs planning is designed to help people (whether minors or adults) living with special needs or disabilities. At the core of some of this planning is the idea of creating a special type of trust that can provide help to the intended beneficiary but to do so without disqualifying the beneficiary for governmental programs that might be essential for the well-being of the beneficiary. These rules vary from state to state and over time so it is important to use an attorney who specializes in special needs planning in your estate, and to periodically review that planning.

This planning should consider the needs of the special beneficiaries, state law, trust terms, financial status, etc.

One of the worst mistakes is for you not to disclose all relevant information to your attorney so that they know how to help you. This type of planning probably should not be done using online document websites, although some charitable organizations serving those with special needs may help.

Some people bequeath all their wealth to a child who has no health or special challenge and trust that child to provide for the special needs child. That can be dangerous as if that well child is unethical, is sued or divorced, the special needs child could suffer.

Consider how much wealth to put into a special needs trust. If you are very wealthy at some point perhaps directing additional wealth to the special beneficiary or a trust for them, may not be helpful.

Evaluate savings and life insurance as often you have to balance bequests to well beneficiaries and taking care of the special beneficiary.

Consider that a special beneficiary may qualify for a longer payout of retirement assets.

Consider who provides care currently to the special beneficiary and what happens when that care giver becomes disabled or dies? Consider whether a guardian or successor guardian should be appointed.