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Protecting Special Needs Children through Estate Planning

Originally posted on 01/09/2017

A child with special needs looks out over their balcony. When we create our estate plans, we intend to leave something for our heirs in order to remember us, or to make sure they are taken care of. Indeed, these are well-intentioned goals, but leaving certain assets could have unintended consequences for those in financial need.

For example, recipients of supplemental security income (SSI) could lose their right to such benefits if they inherit money or assets. Essentially, federal rules prohibit such beneficiaries from receiving benefits if they have more than $2000 in assets. Because of this, caregivers must be careful about leaving considerable assets to pay monthly bills because this method of generosity could lead to a denial of future benefits.  

This post will highlight a few ways to protect the future of your children with special needs.

Create a Special Needs Trust

Indeed, federal rules prevent an SSI beneficiary from owning assets worth over a certain amount, but they do not prevent another entity from doing so. More importantly, they do not prevent the beneficiary from being a beneficiary to a special needs trust. This way, parents or loved can bequeath assets or money to the trust, without offending the rules.

Set Up an ABLE Account

If a special needs trust is not helpful, an ABLE account may be useful. Through these special accounts, caregivers may set aside up to $14,000 per for special needs children that will enable them to pay for regular expenses in the future. Federal law allows these accounts to grow to up to $100,000 without Medicaid or SSI eligibility being affected. 

Partner with Aldrich Legal Services to Plan for the Future of Your Children with Special Needs

The future is uncertain, especially for those with additional care requirements. Help protect your children's future with estate planning from experienced attorneys like those at Aldrich Legal Services. Give our team a call toady. 

REAL ESTATE 89: RM had not included any language in the deed providing that the property was a joint tenancy with full rights of survivorship, the property instead became a tenancy in common.

RM drafted the deed without seeking counsel and mistakenly believed that, if either she or FK died, the property would fully pass to the surviving tenant. FK’s will provided that if his wife predeceased him—which she did—the personal representative of his estate should sell any residual property that he owned and divide the cash proceeds equally among his surviving children.

FAMILY LAW 83: A trial court can terminate a parent’s rights and permit a stepparent to adopt a child.

A trial court has discretion to terminate a parent’s rights and permit a stepparent to adopt a child when the conditions of MCL 710.51(6) are met. MCL 710.51(6)(b) requires the petitioner to establish that the other parent had the ability to visit, contact, or communicate with the children, and substantially failed or neglected to do so for a period of two years.

PROBATE 53: The trust agreement included an Incontestability Provision.

A settlor’s intent is to be carried out as nearly as possible. Generally, in terrorem clauses are valid and enforceable. However, a provision in a trust that purports to penalize an interested person for contesting the trust or instituting another proceeding relating to the trust shall not be given effect if probable cause exists for instituting a proceeding contesting the trust or another proceeding relating to the trust.

FAMILY LAW 82: Court stated it would terminate the personal protection order (PPO) after the parties present documentation of the initiation of the divorce proceedings.

However, the trial court concluded that these matters should, in fact, be in the province and the jurisdiction of the Family Division and in that respect, having issued a personal protection order, the Court stated it would terminate the personal protection order after the parties present documentation of the initiation of the divorce proceedings.

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