The following fifteen common assets and applicable beneficiary designations should be reviewed to make sure they will not be paid (or given) directly to the special needs child: (1) IRA, 401(k) and other retirement benefits. (2) Life insurance (including employer-provided life insurance) benefits. (3) Accidental death and travel insurance benefits…
The thirteen benefits of an inter-vivos stand alone third-party created and funded SNT are: (1) The trust can be established by the parents (or by any third party, such as the grandparents) for the benefit of the special needs child. (2) The trust provides for the investment and management of…
The principal purpose of a third-party created and funded SNT is to provide an inheritance for the special needs child without risking the loss of important government benefits such as SSI, Medicaid, etc. Consequently, it is important that grandparents and other relatives (including the siblings of the special needs child)…
The trustee of a third-party created and funded SNT is given complete discretion in making distributions to or for the benefit of the special needs child. Thus, who should serve as the trustee of a third-party created and funded SNT is important. The selection of the trustee involves many considerations,…
There are five estate planning options available to parents concerning their special needs child: (1) Distributing assets outright to the special needs child (not recommended since the assets may disqualify the child from receiving means-tested government benefits); (2) Disinheriting the special needs child (generally not recommended since the child will…
Tax planning should not be ignored when preparing an estate plan that involves a special needs child. There is a general (and incorrect) assumption among some estate planners that taxes are of little or no concern to families of special needs children. Income taxes, estate taxes, gift taxes, and the…
Five Essential Estate Planning Documents For A Special Needs Family. At the minimum, a special needs child deserves a parent’s continued stewardship and guidance, even though the parent may be incapacitated or deceased. Therefore, the parents of a special needs child should typically have the following five estate planning documents…
In addition to the usual hurdles that parents face when preparing an estate plan (e.g., who should be the guardian, trustee, executor, etc.), the parents of a special needs child are faced with five unique estate planning challenges: (1) How to provide for all of their loved ones without jeopardizing…
There are at least seven options for family philanthropy, each of which has its own strengths and weaknesses from tax, regulatory, and personal perspectives. Some are extremely complex while others are simple. 1. Private Foundation According to the IRS in 2006 65% of the 80,000 private foundations had assets of…
Given that many GRATS are now underwater and will not likely recover. Grantor can purchase assets, acknowledge that the GRAT will fail and create a new GRAT with the assets. If the GRAT contains an annuity payment and the grantor believes that that the underlining asset will still preform over…