WRITTEN BY STEPHANIE BOUCHARD
All parents worry about their kids and the future, but for parents of children with special needs or certain impairments those concerns can be a huge stressor. As you get older, who will meet the specialized needs of your child?
Making advanced plans can help alleviate worries about what will happen to adult children in the event that the parent dies or is no longer able to be their caretaker.
Setting Up a Trust
From a financial standpoint, there are several things parents can do, says Kristy Hapworth, a trust and estate attorney with Rudman Winchell in Bangor.
A special needs trust, sometimes referred to as a supplemental needs trust, is one option for parents. When drafted and administered properly, this kind of trust can allow the adult child to benefit from the trust assets while continuing to receive their means-tested public benefits, such as Medicaid or Supplemental Security Income.
“When done properly, the assets of the trust are not counted as the recipient’s assets,” Hapworth said. “It protects the funds in a way that allows that trust to provide for things that the public benefits don’t provide for, so instead of your child having to live on the bare minimum, which is honestly at best what public benefits cover, your child can get their benefits and then the money that you leave to them can actually go towards supporting their quality of life instead of just helping them survive.”
For adult children who are not defined as disabled by a legal authority or who do not rely on public assistance programs, but who have addictions or mental illness, a traditional spendthrift trust, which is another type of third-party trust, may be a good option, Hapworth said.
In a third-party trust, a person, such as a family member or professional fiduciary, or a group of people, or an entity such as a bank, is designated trustee to manage the funds in the trust, but the beneficiary does not have direct access to the money in the trust.
If you think you don’t need a trust for your disabled or impaired adult child because you don’t have any money, think again.
“What people might think of as a lot of money or not a lot of money may be really different from what the public benefits programs consider to be a lot of money,” Hapworth said.
For example, after your death, your adult disabled child receiving means-tested public benefits may lose those benefits if they receive money from the sale of the home you owned.
Available Resources
If the cost of an estate attorney is out of reach for you, there are resources, such as the Maine Volunteer Lawyers Project and Legal Services for Maine Elders, which provide legal services for free or discounted rates.
There are also a variety of free resources online that can help guide you, such as the Academy of Special Needs Planners’ Special Needs Answers website and the Arc’s Center for Future Planning website.
Some other things aging parents can do include:
- If your adult child has the capacity, have them set up a power of attorney and a healthcare directive to put in place someone who can step in and provide supportive decision-making.
- In your will, designate or nominate a successor guardian or a conservator or a representative payee for Social Security benefits.
Get Organized
Help alleviate your own worry and make it easier on those who may one day have to step in to help your child by being organized and having systems in place. Create documentation that collects all the information about your child’s benefits, explains all the roles that you have been playing for them, and who the contacts are at the various agencies and organizations your child relies on.
“In the event that the parent dies with that information in their head and the child doesn’t understand enough to know it,” Hapworth said, “you can do something as simple as be organized and leave the right information behind so that whoever is going to help you can do that for you.”
