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 the special needs child’s current (or potential) eligibility for means-tested government benefits such as SSI and Medicaid;
(2) How to design an estate plan that supplements the special needs child’s means- tested government benefits and enhances the quality of the special needs child’s life;
(3) How to treat the other children equitably while adequately providing for the special needs child;
(4) How to make sure there are sufficient funds available at a parent’s death to care for the special needs child; and
(5) How to provide for the proper supervision, management, and distribution of an inheritance for the special needs child through a third-party created and funded SNT
Of these, five unique estate planning challenges, above items 4 (sufficient funds) and 5 (proper supervision and management of the funds) typically prove to be the most difficult to implement. This is especially true: (i) if the majority of the parents’ estate is composed of retirement benefits (see, Section 9, below, concerning retirement benefits), (ii) if the proposed trustee is inexperienced in administering SNTs, or (iii) if there is an experienced trustee available that is knowledgeable about special needs (typically a corporate or professional trustee), its minimum annual fee is too high relative to the proposed size of the SNT.
When creating a Florida Estate Plan your lawyer should ask about special needs.