Estate Planning for Children with Special Needs Part II

For the Children

Parents who have a child with special needs often undertake estate planning to insure that any inheritance left for that child will be preserved for his or her benefit.  Proper planning will preserve eligibility for needs based government programs such as SSI and Medicaid while allowing the child’s inheritance to flow into a trust that can enhance his or her standard of living.  Yet prudent planning recognizes not only the distribution and management of an inheritance, but also the handling of the personal, medical and financial issues that will arise in the life of that child.

Parents frequently are under the misimpression that they have the legal right to always make decisions on behalf of a child if he or she has disabilities.  Understandably, many rationalize that such a child is always a child, never truly an adult, and thus will always need their oversight and protection.  The law, however, states any individual, regardless of the existence of a disability, is considered emancipated at the age of eighteen (18).  Thus, parents who undertake estate planning for themselves need to undertake the same on behalf of their children.

This planning can come in two forms.  The first is known as a guardianship.  A guardianship is a process where a court declares a child to be mentally incapacitated.  In doing so, the court finds that this child is unable to make personal, financial and medical decisions on his or her own behalf.  The court thereby appoints one or both of the parents to make these decisions on their behalf.  In doing so, it can establish a plenary guardianship, which allows parents to make any and all decisions.  An alternative is a limited guardianship, which allows the child to retain the right to make certain decisions, typically of a nominal nature.

The second form of planning is voluntary estate planning.  Just because a child has disabilities does not mean he or she dos not have the mental capacity to execute his or her own estate planning documents.  If a child knows what she owns and to whom she wants to leave it when she dies, she can execute a Will.  If she knows that she is executing a document which provides authority for her parents, or anyone else of her choice for that matter, to assist her in making medical, personal and financial decisions, she can execute an advance directive (i.e. a living will and health care power of attorney) and a general durable power of attorney.  If this option is viable, it is often preferable as it is far less costly to establish and maintain than a guardianship.  Moreover, it avoids the need to publicly declare a child as mentally incapacitated.

In all, planning is necessary for children with special needs, as well as their parents, as it ensures such children’s well being when they become adults.  Proper counsel can help guide parents in establishing the best possible plan for their, and their child’s, particular circumstances.


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