Factors to Consider When Estate Planning for a Loved One with Special Needs

Estate planning for a loved one with special needs can be a complex and daunting process. You need to make sure the plan is flexible enough to account for any unknown circumstances that could arise, but also that it is customized to fit the needs of your loved one.

The following are a few tips to keep in mind as you go through the process:

• Choose the right trustee. If you develop a special needs trust (a highly recommended tool in these types of situations), it’s important to choose the right person to serve as trustee. This person’s role, first and foremost, is to administer trust funds. You might select both a family trustee and a corporate trustee. The corporate trustee can invest and manage the funds, while the family trustee can make the everyday decisions regarding how the funds will be distributed. The latter person should be intimately familiar with your family and your beneficiary’s needs.
• Draft a letter of intent. Although this letter is not considered a legally binding document, it does give you the opportunity to provide a guideline for how your loved one should be cared for in your absence. It should include information about medication, treatment, emergency contacts and any other necessary information to ensure your loved one gets the proper care. Even, better, be sure your intent is fully described in the trust you leave for your loved one.
• Take care of retirement accounts and insurance policies. You should name the special needs trust as the beneficiary of these accounts and policies to ensure everything goes smoothly with benefit distribution. However, great care is needed when naming a trust as a beneficiary of a retirement plan to avoid triggering early taxation of the plan.
• Guardianship and advance directives. If your loved one with special needs is a legal adult, he or she may prepare advance directives for assistance in medical decisions. If the individual were incapable of understanding these types of documents, a guardianship would be an appropriate measure to take.

For further legal guidance on setting up special needs trusts, contact the experienced Tampa estate planning lawyers at BaumannKangas Estate Law.