Estate Planning

As a parent of an autistic child, planning your estate is important to make sure the future needs of your child are provided for. These are few topics we found helpful:

 

Estate Planning

Parents of autistic children face unique challenges in planning for their children’s social, medical and financial needs. Planning for the unthinkable allows you to take control of your child’s emotional and financial security. It will also give you peace of mind to know  that your child will be cared for in the way you intended.

Many families believe that they have so few assets that an estate plan is not necessary. This is not true. We often have more assets than we realize, although some assets may become important only after our death. The most notable asset of this type is life insurance. Therefore, whether you consider yourselves a family of substantial means or with little or no assets, estate planning should be done.

 

The primary factor will be whether or not your son or daughter receives (or may one day need to depend on) government benefits such as Supplemental Security Insurance (SSI), subsidized housing, personal attendant care, or Medicaid. If,  he or she acquires too many assets through inheriting all or part of your estate, he or she may be ineligible for these benefits. Therefore, in order to protect your son or daughter’s eligibility for government benefits at some point in the future and to provide for his or her long-range needs, you may need to consider establishing a special estate plan.

If your son or daughter’s disability affects his or her mental capability, the need to create a special estate plan is more clearcut. Mental illness and cognitive disabilities often impair a person’s ability to manage his or her own financial affairs, while simultaneously increasing financial need. As a result, you must take care to ensure that there are assets available after your death to help your son or daughter, while also providing that the assets are protected from his or her inability to manage them.


Writing a WillIf at death you have no will, your property will be dispersed according to the law of the state in which you live at the time of your death. This law is called the state’s law of intestacy. Although laws of intestacy vary from state to state, in general they provide that some percent of assets of the decedent passes to the surviving spouse and the rest is distributed to the children in equal shares. Writing a will is highly recommended, since the laws of intestacy are rarely the most desirable way to pass property to one’s heirs.

 

Although it is theoretically possible for any individual to write a will on his or her own, it is unwise to do so. Because of the technical nature of wills, it is highly advisable to have a lawyer prepare one. Parents of individuals with disabilities particularly need legal advice, because they often have special planning concerns. If you do not have a lawyer, you can call the local bar association, which will provide you with the name of an attorney in your vicinity. It is preferable, however, to contact a local disabilities group, which may be able to put you in contact with an attorney familiar with estate planning for parents of persons with disabilities. Not all lawyers are familiar with the special needs associated with caring and providing for individuals with disabilities.

When making a will, however, remember that not all the assets you control are governed by a will. Joint property with right of survivorship, for example, passes independently of a will. Similarly, life insurance is paid out to the named beneficiary without regard to the will. The insurance is a contract between the owner and the insurance company, and the insurance company must pay the insurance to whomever the owner states. Many individuals have death benefits under an employer-provided pension plan. These, too, are not governed by the will but are paid to whomever the employee has designated. (Note: If you create a special estate plan to provide for your child with a disability,  in particular, if you set up a special needs trust, review any life insurance policies you have purchased, and be sure that you have not designated your child as a beneficiary.)

Personal property, such as clothing, furniture, and household effects, should be distributed by the will independently of the often more valuable assets such as stocks, bonds, and real estate. Personal property is often of great sentimental importance, but may have little financial value. To avoid disharmony after the death of the last parent, it is generally a good idea to make an equal division of the personal property among the children.

Remember, a will goes into effect only upon the death of the person who created it. Until death, the creator of the will can freely revoke, alter, or replace it.



What to Consider When Planning Your Estate:
First: Realistically assess your son or daughter’s disability and the prognosis for future development. If necessary, obtain a professional evaluation of your child’s prospects and capability to earn a living and to manage financial assets. If your child is younger, it may be more difficult to predict the future. In such cases, you should take a conservative view. It is better to anticipate all possibilities, good and bad, in such a way that you do not limit your loved one’s potential or set him or her up for unrealistic expectations. Remember, too, that you can change your estate plan as more information about your child becomes available.

Second: Carefully inventory your financial affairs. Estimate the size of your estate (what you own) if you should die within the next year or the next ten years. Keep in mind that the will you write governs your affairs at the time of your death, and so it must be flexible enough to meet a variety of situations. Of course you can always write a new will, but you may never actually write it due to hectic schedules, procrastination, or oversight. Thus, the will you have written must have sufficient flexibility to meet life’s everchanging circumstances.

Third: Consider the living arrangements of your son or daughter with a disability. The prospective living arrangements of your son or daughter will have a tremendous impact on how your estate should be distributed. If you conclude that a guardian or conservator is necessary, you should be prepared to recommend a potential guardian or conservator in your will.

Fourth: Analyze the earning potential of your son or daughter. If your child is presently too young to be employed, you will have to project into the future. In many cases, even if your son or daughter is employed or expected to be employed at some point in the future, he or she will require additional financial assistance.

Fifth: Consider what government benefits your son or daughter needs and is eligible to receive. Support for a person with a disability will usually come from state and federal benefits. These might be actual case grants, such as social security or supplemental security income, or they might be in-kind support programs, such as subsidized housing or sheltered workshop employment.

Government benefits can be divided into three categories. First are those categories that are unaffected by the financial resources of the beneficiary. For example, social security disability insurance (SSDI) beneficiaries receive their benefits without regard to financial need. Regardless of what the parents leave to a son or daughter with a disability, the social security payments will still be forthcoming once the person has qualified for them.

Second, some government benefits, such as supplemental security income (SSI) and Medicaid, have financial eligibility requirements. If a person with a disability has too many assets or too much income, he or she is not eligible to receive any or all of these benefits. Someone who is eligible due to a lack of financial resources can become ineligible upon inheriting money, property, or other assets.Therefore, if your son or daughter is receiving government benefits that have financial eligibility requirements, it is important to arrange your estate in a manner that will minimize his or her loss of benefits, especially SSI or Medicaid.

Finally, there are government programs available to individuals with disabilities where payment for services is determined according to the person’s ability to pay. Many states will charge the individual with a disability for programmatic benefits if he or she has sufficient assets or income.


Possible Approaches in Establishing a Will:
First, you can disinherit your son or daughter with the disability. No state requires parents to leave money to their children, disabled or not. If your assets are relatively modest and your son or daughter’s needs relatively great, the best advice may be to disinherit your child by name and have him or her rely upon federal and state supports after your death, particularly if you wish to help your other children.

Second, you can leave your son or daughter with a disability an outright gift. If your child with a disability is not receiving (and is not expected in the future to need) government benefits, this may prove to be a desirable course of action. Your son or daughter, if mentally competent, can hire whatever assistance he or she needs to help with managing the gift. But if your son or daughter has a mental illness or cognitive disability, an outright gift is never a good idea, because this person may not be able to handle the financial responsibilities. If you want to leave a gift to support your child, the use of a trust is far preferable.

Third, you can leave a morally obligated gift to another of your children. The danger of morally obligated gifts is, of course, that the morally obligated recipient, may ignore the wishes of the parents. Morally obligated gifts can be useful, however, especially when the parents have a modest amount of money and do not expect a lifetime of care for their son or daughter with a disability. Rather, they merely want their nondisabled sons or daughters to use some of the inherited money to assist their sibling with special needs.

Fourth, you can establish a trust for your son or daughter with a disability. For many parents who have a child with disabilities, the use of a trust is the most effective way to help that individual. The point of a trust is to keep assets in a form that will be available to your son or daughter but that will not disqualify him or her for government benefits for which he or she might otherwise be eligible.


Special Note: While we have endeavored to present useful and accurate information, you should be aware that laws and procedures are constantly changing and that this is not a substitute for seeking expert advice. To formulate a legally valid estate plan, you will need the services of a professional familiar with estate planning, preferably one who has expertise in planning for parents of persons with disabilities like autism.