More people with developmental disabilities are living to adulthood and even into their senior years. As a child with developmental disabilities grows older, parents begin thinking about how to secure their loved one’s financial future as the care they need can be expensive. While government programs and community resources provide essential help, significant family resources are often needed as well. Planning an inheritance for a child with a developmental disability requires special considerations. Here’s why:
A direct gift or bequest may not be appropriate, for two major reasons:
- The individual may not be capable of managing significant assets without assistance;
- It may be necessary to maintain eligibility for government programs that have income and asset limits
One alternative to a direct gift is making a gift to a family member, such as a sibling, who can be trusted to use the assets in the best interests of the individual witha disability. However, the family member must be willing and able to take on that responsibility and the gift would then become part of his or her estate, leaving it open to be lost in a divorce or claimed by creditors.
Another alternative is a special needs trust, which can help the individual with special needs maintain eligibility for government programs, while making funds available to enhance his or her quality of life. Creating a special needs trust is a complex task that should be done with the assistance of an estate planning attorney, experienced with special needs issues.
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