All parents should have a comprehensive plan in place to provide for their children in case of their own unexpected death or incapacitation. Parents should consider both the future financial well-being of their family and who will act as a guardian in their absence. Although creating a financial and estate plan is important for all parents, having such a plan in place is absolutely crucial for the parents of a child with special needs.
Understandably, it may be easy for the parents of a special needs child to get caught up in their daily routine and overlook their financial and end of life planning. Coping with issues that may be associated with Down syndrome, autism, cerebral palsy, and many other disabilities can often be overwhelming. Still, one of the best financial decisions the parents of a disabled child can make is to create a special needs trust.
A special needs trust is designed to cover living and other expenses for a specific child without placing the funds inside of the trust within the child’s control. Such a trust also allows a disabled individual to inherit or be financially cared for without losing access to important benefits like Supplemental Social Security Income or Medicaid coverage. In order to establish a special needs trust, one or more trustees must be selected to manage the trust. Although parents typically serve as the initial trustees, they must be sure to select a trustworthy individual to take over the management of their child’s trust after they die.
Because of the flexibility of a special needs trust, many parents of disabled children choose to use such a legal instrument while they are alive and as part of their estate plan. Large gifts or family inheritances may be placed in the trust at any time. Additionally, parents often choose to purchase additional life insurance policies that are paid directly into a special needs trust. By doing so, parents can provide out-of-pocket medical and other expenses for their disabled children long after they are gone.
There are many benefits to using a trust as a Wisconsin estate planning tool. A wide variety of trust instruments are available for your use depending on your specific needs. Because revocable living and other trusts are not subject to probate in Wisconsin, you have the ability to save your loved ones both time and expense by creating and properly funding a trust. If you are considering establishing a special needs or other trust, you should contact a knowledgeable Wisconsin trusts attorney.