It is crucial, when planning for the care of special needs children that a parent talk with a good estate planning attorney. Giving a special needs child an inheritance will very likely diminish or eliminate benefits (including means-tested government benefits) that a special needs child is receiving. A better way to benefit a special needs child upon death is to create a "Third-Party" special needs trust. We at Hughes Estate Group, Attorneys, would be glad to answer any questions you may have regarding special needs trusts. Give us a call at 801.364.5600.
There are good sources (in addition to estate planning attorneys) that discuss special needs trusts. A recent article found in the July/August 2009 issue of Probate & Property by Sebastian V. Grassi Jr., titled "Estate Planning for a Family with a Special Needs Child" touches on Special Needs Trusts. Mr. Grassi says, "The principal purpose of a third-party created and funded SNT is to provide an inheritance for the special needs child without risking the loss of important means-tested government benefits such as SSI, Medicaid, and so on." (p. 17)
Another resource is the book titled, Special Needs Trust Administrative Manual, a Guide For Trustees, found online. While this guide is sometimes focused on Massachussets law, the guide nevertheless gives you not only an idea of what special needs trustees are required to do, but how a special needs trust works.
Here at Hughes Estate Group we subscribe to the "Special Needs Trust Handbook," published by Aspen Publishers which is updated on a regular basis, keeping our Firm up-to-date on Special Needs issues. It is expensive but is a resource for the person wishing to be really up to speed in the Special Needs arena.
In addition, the Nolo Press book titled "Special Needs Trusts" by Stephen Elias is a good book for laymen to get an overview of Special Needs Trusts in preparation to talking with a good attorney. We would highly discourage using the boilerplate forms in the book. The forms do not cover a wide variety of critical tax and legal issues involved in establishing and administering special needs trusts and may cause critical harm to your special needs beneficiary. Other than the forms, the book is a good introduction to Special Needs Trusts.
In addition, the following websites are helpful.
Social Security Trust Spotlight
Special Needs Trust for Austism
The Center for Special Needs Trust Administration, Inc.
Tougher Rules for Retirement Brokers
2 hours ago