October is National Special Needs Law Month. Special needs planning is a special area of focus in our law practice that we work with clients on throughout the year. The month of October, however, gives us time to focus on educating our clients, community, friends, and family, on why this form of estate planning is so very important to the lives of individuals facing disabilities.
There are many legal considerations you need to think about if you are planning for someone who has a disabling condition. While we understand you may want to avoid this topic due to the difficult challenges it forces you to face, such as a time when you are no longer here, you cannot wait to complete your California estate planning. It is critical that you plan ahead for the long-term future of your loved one with special needs.
Why is it so important to act sooner rather than later? When someone with a disability, regardless of the type of disability, reaches the age of majority there are many changes that can take place. For example, did you know that even if a person has autism and is extremely high on the spectrum or can barely function for him- or herself, under almost all circumstances, the parent no longer has the legal rights to make financial or health care decisions once the child is deemed an adult? Without proper estate planning in place to protect them, even persons with a significant developmental, cognitive or mental health disability are legally permitted to make decisions at the age of majority.
What should you do as a parent or grandparent of a disabled individual? For years, you may have spoken to the school, to banks, financial institutions, doctors, specialists and so many more on behalf of this person. We especially see this in minor children who reach the age of majority. It is critical to act to put a plan in place that can help you. If your child has the requisite capacity to make advanced directives, such as powers of attorney or health care planning documents, you need to consider creating them sooner rather than later with your estate planning attorney to secure these less restrictive alternatives to court proceedings.
Your attorney with specific expertise in this area can give detailed guidance in planning and decision-making. Your attorney will not only help you with developing a plan of care for your loved one with disabilities but work with you to ensure that your California estate planning is comprehensive and up-to-date. You need to ensure your legacy will provide for your child should something happen to you. Planning ahead for a future where you are no longer here is extremely important. You do not want the person with disabilities to be left to his or her own defenses, or let the court make decisions through the intestacy process in the probate court.
Further, a special needs trust can be set up for people with disabilities to ensure that money will be available for a person with disabilities throughout his or her lifetime. It can be used for a special needs beneficiary while not interrupting his or her ability to receive public benefits, such as Medicaid or Supplemental Security Income. There are two main types of special needs trusts. A Third-Party Special Needs Trust holds property provided by someone other than the disabled person, while a Self-Settled Special Needs Trust, is designed to hold property belonging to the person with disabilities. In the latter example, if this person benefits from Medi-Cal or other government programs, there is almost always a payback provision for the public funds received by the disabled person in life.
You and your loved ones deserve the best planning possible. The key is to plan ahead both for your loved one and yourself. If you know someone who has a disability, especially if you are his or her caregiver, be sure this person is legally taken care of. Do not wait to ask us your questions now, or at any time throughout the year.