Don’t Forget the Least In Our Midst


Don’t Forget the Least In Our Midst

Over the months that I have been writing this column, there is one area of planning that I have not identified or stressed enough.  This week I have been confronted with the sad outcome of a parent who did not plan for the care and upkeep of their dependent adult child.  Simply put, when the parent died, the child is now forced to move into housing for the homeless without the skills required for independent living.

 Parents of disabled children should give some thought to what will happen to their child should they become incapacitated or pass away? If this is you or someone that you know, taking proactive, thoughtful steps now can help ensure that a disabled child receives proper care and financial support, while also preserving their eligibility for vital government benefits.

A crucial starting point is establishing a Special Needs Trust (SNT). This specialized trust allows you to set aside assets for your child without jeopardizing Supplemental Security Income (SSI) or Medicaid. Instead of leaving money directly to your child, funds go into the trust and are managed by a trustee you choose. This trustee distributes money for approved expenses such as therapies, education, and personal care, protecting benefits your child depends on.

Next, draft a comprehensive Letter of Intent. Although not legally binding, this document provides future caregivers and trustees with essential guidance about your child’s medical needs, daily routines, preferences, and personal history. It paints a complete picture of your child’s life, easing the transition should you no longer be there to explain it yourself.

Legal guardianship decisions are equally important. Designate a guardian in your will to take over personal and medical decisions for your child if you are no longer able to do so. Naming backup guardians adds an extra layer of security.

Your overall estate plan should be carefully reviewed to coordinate with the special needs trust. Avoid leaving assets directly to your child; instead, direct them to the trust through your will, life insurance, and retirement accounts. Beneficiary designations must be updated to reflect this strategy.

Additionally, set up financial and medical powers of attorney for yourself. This ensures that your financial matters and healthcare choices can be managed without court intervention if you become incapacitated.

Funding the trust adequately is vital. Many parents use life insurance policies to provide long-term financial support, calculating anticipated care costs to determine appropriate coverage amounts.

By thoughtfully addressing these key areas, you protect your child’s access to crucial benefits and create a clear plan for their lifelong care. These steps offer comfort, knowing your child’s needs will be met even when you can no longer provide that care personally, don’t forget the least in our midst.

THIS WEEK’S QUIZ: When should the beneficiary of an insurance policy not be a person? 

 

Answer to last week’s quiz: If you are over the age of 50 you can increase your annual maximum contributions to your IRA (Individual Retirement Account).

To get a more detailed answer to last week’s QUIZ question or for any financial questions that you may have, please contact me: 773-817-0601 or basheriff1@gmail.com

Disclaimer: The illustrations presented in this column are not, nor are they intended to be, legal, financial, or any other licensed professional advice, you should contact the licensed professional of your choice for advice on your individual situation.



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