How can estate planning protect your child’s special needs?

On Behalf of | Dec 17, 2021 | Estate Planning

Colorado parents who have children with special needs may relish the idea of their children having a much longer life expectancy in many cases than decades ago. This likely means that you, as the parent, will pass on before your child, and while you may feel that is the natural order, you may still have concerns about the care your child will receive after your passing.

Though mental and physical conditions can create varying dependence levels, your child may be one who still needs considerable care even in his or her adult years. While you are likely happy to provide that care for as long as possible, you likely also want to ensure that your child will continue to thrive even after you are gone.

Planning for the future

Fortunately, you could take various planning steps to ensure that your child’s physical and financial well-being is not negatively affected by your passing. One of the most common options for setting up your child financially is to use a special needs trust. Some details to consider regarding this option include the following:

  • ­­­Setting up the trust early — before your child reaches the age of 18, if possible — could ensure that the trust is ready to protect assets when needed.
  • There is no limit to the amount of money or value of assets you can place into the trust.
  • Make sure that you appoint a responsible person to act as the trustee. Often, family members who also care about your child and will act in his or her best interests are worth considering.
  • Remember that rules apply to how one can use funds from the trust if your child receives certain benefits, such as Supplemental Security Income.

In addition to financial stability, personal and medical care are also vital to consider. You and your child may need to set up a power of attorney to appoint a trusted person to act on your child’s behalf when necessary. A specific person could handle both the medical and financial needs of your child, or you and your child could appoint two different people for the roles.

Having legal documents

Though you may know that a trusted family member would readily step in to care for your child if you no longer could, it is essential that you have these plans in formal legal documents. Without them, the arrangements you hope for your child have a greater risk of falling through.