Daniel P. Randolph, Esq.Many families will confront a medical or personal care expense that is beyond anyone’s planning capabilities. It might be a loved one is diagnosed with a debilitating disease or you have a child who is born with special needs. Ordinary estate planning is no longer applicable. You need someone who understands not only your financial needs but also the complicated emotional state of all the family members.

A big concern when planning for a relative with a disability is how to pay for care if you pass away before the relative with special needs does. Typically, the best plan is to create a supplemental needs trust (also known as a special needs trust). Potential funding of this trust includes money you are leaving in your Last Will and Testament, current savings, or a life insurance policy. It is critical that the trust be drafted by an attorney who knows the disability rules.

Parents, relatives or friends can create and contribute to a third-party supplemental needs trust. Because the money never belonged to the child with special needs, it will not interfere with his or her government benefits. The trust can cover “extra” needs, such as personal care, gifts and travel. If the individual personally comes into money, whether it be from an inheritance or an insurance settlement, that money can go into a self-funded supplemental needs trust. The individual can continue on any government benefit(s) received, but when he or she passes away, the government reaches into the self-funded trust to recover the money it has expended.

It is hard to plan perfectly for a relative with a disability. Families in these situations are not alone and should have a team of people for support. This team of support can include legal support, financial support, emotional support and spiritual support. The worst thing a family can do is not plan for an individual with special needs.