Legal Planning

Special Needs planning is comprised of four unique components that are intertwined. Each one is important to address in order to have confidence that the comprehensive special needs plan has the greatest potential impact.

In my five part blog series, I will briefly discuss each component of a comprehensive Special Needs Plan and help you think through some important aspects in each area of planning.

In this post, part five of my five part blog series, I will cover the importance of having a Legal Plan for your loved one. A well thought through legal plan will ensure that your main intentions in the Life Plan, Resource Plan, and Financial Plan are carried out.

The purpose of legal planning is to control and protect your assets and transfer them to others as you wish- either during your lifetime or after your death. Discussions with a trusted attorney should revolve around how your assets and insurance will be used to take care of your family- now and in the future.

In consultation with an attorney, you will create, at minimum, three components of your legal plan. Depending on the complexities of your situation, you may need additional documents. A trusted attorney will be able to guide you through your unique needs.

  1. Will– A will has four purposes in a special needs plan. First, it appoints someone to handle your affairs and manage your estate after your passing. Second, a will transfers your assets to the individual(s) who you wish to take care of. Third, a will directs the payments of debts and taxes from the cash in your estate. The fourth and most important part of a will in a special needs plan is to appoint someone as guardian over your child with special needs who is committed to fulfilling the goals and aspirations described in your child’s life plan.
  2. Power of Attorney– A power of attorney is a document that appoints someone to make legal, financial, and healthcare decisions for you when you are not able to. In regards to your special needs plan, it is important that this document names someone who will be able to make decisions for your child when you are not in the capacity to do so.
  3. Special Needs Trust– I have found that many people think trusts are confusing. In basic terms, a trust is a legal agreement between an individual and a trustee to manage assets for a designated beneficiary. A Special Needs Trust allows money to be set aside for an individual with special needs without causing him or her to lose eligibility for government benefits. Currently, $2,000 is the limit that an individual with special needs can hold in his or her own name while still receiving government benefits. The Special Needs Trust was designed to supplement government benefits. In order to do this, the individual with special needs is the trust’s beneficiary. This individual does not have control over any part of the trust, including distributions. The trustee owns and manages the trust. He or she is also responsible for making distributions from the trust to the beneficiary.It is critical that the attorney who creates your Special Needs Trust is very familiar with the exact language that needs to be included.

Any decisions that you make through legal and estate planning can affect your financial plan. For this reason, it is essential that your financial professional and legal representative are both aware of the intentions that you have in regards to your planning goals. To assist with this, I often offer to be present with clients as they create their legal plan with a special needs attorney.

The four aspects of special needs planning can seem overwhelming, frustrating, and confusing at times. These feelings can often result in no plan being created. A special needs planning professional will be equipped to ask the right questions to make the planning process easier and more impactful. He or she will be able to guide you through the process and share the needed resources.

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