Planning for individuals with special needs often involves complex legal issues. Below are a few common topics that are relevant to this area of estate planning:
Parents with specials needs children are accustomed to taking care of all of the child’s needs and making every decision regarding that child’s financial and medical welfare. However, when a disabled child turns eighteen (18), that child is legally an adult, and by law the parents no longer have authority to act for that child, no matter how severely disabled that child is. In Louisiana, we have a procedure called a Continuing Tutorship, which applies to children who are over the age of fifteen (15) but under the age of eighteen (18) and who have a severe mental disability which results in that child having the mental capacity of a minor for the rest of his or her life.Once a parent brings an action for a Continuing Tutorship, the parent will retain the parental rights over that child, and those rights will not terminate when the child reaches the age of majority. If a Continuing Tutorship is not done prior to age eighteen (18), the only way to retain the right to act on behalf of your disabled child is to file an Interdiction proceeding.The Interdiction process is adversarial, and oftentimes very expensive. If you have a special needs child older than fifteen (15) years of age who is severely mentally handicapped, please contact our office in advance of your child’s eighteenth birthday so that we can begin the tutorship process.
Special Needs Trusts
Oftentimes, an individual with a disability should not have cash or other resources in their name, not just because they may be unable to manage their property, but also because having resources over $2,000 will cause the disabled individual to lose their entitlement to government benefits such as Medicaid and SSI. By creating a Special Needs Trust, you will preserve the extra financial resources for the sole benefit of the disabled individual, while maintaining their eligibility for government benefits. If an individual receiving government benefits inherits from a parent or other individual outright, or receives a personal injury award as a result of a claim for damages, you can create a Special Needs Trust to protect those resources and ensure they will be preserved for the beneficiary, and managed by a Trustee who can disperse the funds for the benefit of the disabled individual, without any negative impact on the receipt of government benefits.
Designating Tutors by Will and Creating Testamentary Trusts
If you have a minor or disabled child, you will want to designate in your Last Will and Testament the name of the individual(s) who you want to have care and custody of your disabled child when you are gone. Even if your disabled child is not receiving government benefits, you will likely want to create a Testamentary Trust and designate a Trustee who will be in charge of managing the child’s inheritance. You can also create a Testamentary Special Needs Trust, if your child needs to maintain eligibility for government benefits.
Julie R. Johnson is Board Certified in Estate Planning and Administration, and specializes in planning for disabled and special needs individuals.With our legal guidance, you can ensure that the personal and financial needs of your special needs loved ones will be taken care of.