Baldwin Haspel Burke & Mayer LLC

What the Family Needs to Know About Planning for a Loved One with a Disability

Joel Mendler - 

Article last updated: June 19, 2013

I.        Estate Planning in General

A.     Every estate plan must include:

B.     Facts of life in planning for a person with a disability:

II.      Personal Care Alternatives

A.     Minors

B.       Adults

III.     Financial Decision Making

A.      As previously stated, the parents, as natural tutor(s) of a minor child, make decisions with respect to their minor’s property, if any, during minority, but your child makes his or her own decisions upon reaching age 18, unless your child has granted someone a financial Power of Attorney to act as his or her Agent or your child has been deprived of financial decision making as a result of a judgment of limited or full interdiction.  A child may have assets in his or her own name, such as by virtue of an inheritance, personal injury award, gifts from parents or other family members, U.S. savings bonds, or property held in a Uniform Transfer to Minors Act account which becomes payable to your child at age 18.

B.       Louisiana inheritance rights

IV.     Financial Care Alternatives

A.      Outright gifts or bequests to the disadvantaged child – Disadvantages

B.       Gifts or Bequests to Third Parties

V.       Trusts

A.     Offer several advantages over other forms of personal and financial care alternatives.

B.     What is a trust?

VI.     Coordination of the Estate Plan with Governmental Assistance Programs

A.      If the family does not need to rely on governmental assistance programs or is not concerned about potential state reimbursement claims for goods or services furnished to the person with a disability, a different estate plan can be considered.

B.       However, if eligibility for governmental assistance is desired, parents with other children face certain moral dilemmas:

C.       Governmental Benefits

IV.     Planning Strategies

A.     Applying for SSI

B.     If your child qualifies for SSI/Medicaid, make sure there are no family members (divorced spouse, grandparents, aunts or uncles, etc.) who would gift or bequeath assets to your child which would disqualify your child for such benefits, except through a special needs trust.  This is critical if your child receives Medicaid Waiver Services.  The receipt of a gift or inheritance from you or others could make them immediately ineligible for continued benefits, but more importantly, the loss of a Medicaid Waiver slot may mean your child has to wait 8-10 years on a waiting list once countable resources fall below the resource limit.

C.     Prepare a properly drafted Will incorporating a trust or a special needs trust, especially if your child is or is likely to receive means-tested governmental benefits.

D.     Coordinate beneficiary designations (primary and secondary) on all non-probate assets, such as life insurance, retirement benefits and IRAs, with your overall planning, including payment to a special needs trust for a child with a disability.

E.     Consider life insurance to provide an immediate source of liquidity for the benefit of a family member with a disability, particularly a child who may not be able to be self-supporting and whose needs may be greater than other children.  Life insurance can be paid into a special needs trust.

VIII. Consider a Letter of Intent

A.     A Letter of Intent is a document written by you or other family members that describes your child’s history and background, your child’s current status and your wishes, hopes and desires for your child’s future care when you are gone.  It gives future caregivers some insight on medical care and treatment, names of professionals (physicians, caseworkers, attorney, etc.), housing options, daily living skills, education, religious upbringing, personal needs, social and recreational needs, and the rights and values which you want accorded to your child.  Even though it is not a legal document, it provides guidance and information which future caregivers vitally need.

B.     Start by writing it out in longhand.  Don’t worry about grammar.  Later you can type it.

C.     Put the Letter of Intent where it can be found.  Tell close relatives or friends why you have written the Letter, what type of information it contains and where it can be found.

D.     Update the Letter on a regular basis.


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