Sunday, October 03, 2010

Special Needs Trusts

One of the stranger things all parents have to do is prepare their wills. Having a baby is often the first time most of us think about our mortality and what will happen if we were to die.

15 year ago, Deb and I did a will when Meghan was 6 months old. We didn't have a lot then (the bank owned 90% of that house then!) so the will was pretty basic and done through one of these boilerplate law offices. It covered the traditional 'and other children not yet alive' clauses so we didn't think about it much since then.

Similar concerns about life insurance. We bought it, we pay the premiums each month and I don't think much about it.

Then I read an article a couple of months ago about the realities of having an autistic child. As most wills are written, when the estate of the parents is closed, the money from the estate goes directly to the children.

Reality of autistic children though, is that additional money may DISQUALIFY them for some services. Most government services are based on the income level of the recipient (not necessarily the family) so a sudden influx of cash would remove services.

Worst case scenario is he would lose all his services for as long as the cash lasts, then go back (usually after a waiting period), with no income. Which is not what we want.

While we have no idea what Christopher's life is going to be in a year never mind 14 when he's 18, we do need to think about it.

The solution is what is called a special needs trust. When the estate is executed, the money for the child having special needs (not just autism, but anything unusual) is placed into a trust with an executor who decides when/how the money is used. The nice thing is this trust is NOT included in the income of the child, so any services are not lost.

Reading about this, and the realities of grown autistic children, I reached out to a friend to find a lawyer to help set one up.

However, nothing needed to be changed. The basic will had a clause that allowed the executor of the estate to decide if one of the recipients of the estate was not fit to receive the money, to establish a trust for him or her. Basically, the special needs trust for Christopher was already in place.

Even the lawyer was surprised, since he had never seen a generic will written in Georgia that had that clause.

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