Will Your Special Needs Trust Truly Meet Your Child’s Changing Needs?

If you are a parent who has a child with a disability, and you want to build a fortress of safety around your child’s life after you are gone, then this article will give you a core guiding principle to follow and three easy-to-implement tips.

But, before I get to the estate planning principle and my three tips, I’ve got to tell you a quick story: I’ll never forget one January night when the temperature in Chicago was 17 degrees below zero. My Dad phoned me around 8 p.m. and told me my older brother Jon, who is dual diagnosed with an intellectual disability and a bipolar disorder, was just admitted into the hospital for a relatively routine problem. Dad without a thought about waiting until the morning trudged out to his car and drove over an hour through a windstorm of blinding snow to look in on Jon.

At that time…Dad was eighty-four-years-old and battling heart disease, prostate cancer, diabetes, eyesight problems, and the onset of vascular dementia!

I muttered to myself in awe and respect…a parent’s job ain’t ever over…

Parents get that. So much so that I still have to remind some parents that hoping that they will live just one day longer than their child with a disability just ain’t a plan.

Of course, the opposite is true: You have to plan that your child with a disability will probably live 20, 30, or even more years after you pass away.

Another story: A few years earlier, we celebrated Dad’s 80th birthday by having a family reunion down on Sanibel Island, Florida. Dad looked and acted like he was 60. He raced across the tennis court playing singles with his wife, Eleanor, a former model from West Virginia. Eleanor was 18 years younger than Dad and looked more like my wife than Dad’s. (My mother died years earlier.) Dad even pedaled a rented single-speed bike for a 20-mile stretch through Ding-Darling wildlife refuge in 90plus heat with an ear-to-ear grin plastered on his face. Dad’s only admission to his advancing years was he took up golf that year declaring he needed a backup sport in the event his tennis legs didn’t hold up in his 90s!

KerPOW! Just 7 years after our family reunion down in Florida… Eleanor had died of Alzheimer’s. Dad battled dementia, so we moved him into our home. But because Dad’s legs were too wobbly to climb the stairs to get to his second-floor bedroom, our family moved again into a home that had a downstairs bedroom with a full bath for Dad. My wife quit her corporate job after 19 years to care for Dad and our two kids under age 7. And my brother Jon aged out of two residential programs and was hospitalized at least a half dozen times.

Things change. Stuff happens. And I have no doubt you have your own family “war” stories while being in the privileged (I genuinely mean that!) role of caring for your loved ones.

Here’s the planning “takeaway”: The ONLY thing you can count on is the fact that THINGS WILL CHANGE over the lifetime of your child with a disability. Laws will change. Your child’s wants and needs will change. The health of the trustees and guardians may change. Finances may change...and on and on. And, of course, the most stinging change in your child’s life will be when you pass away.

Till now, you have relied on your own resiliency to conquer or untangle the constant barrage of problems or puzzles that arise when caring for your child with a disability. And that’s exactly why when your special needs trust is drafted you have to consider giving the trustee the legal resiliency and flexibility to pilot a course of care through changing times and the ups and downs of your child’s life by including the right language in the special needs trust.

(Note: As most of you know, you generally want to leave your child with a disability’s inheritance to a special needs trust, so the trustee can manage the money and so that the inheritance you leave won’t disqualify your child from receiving need-based government benefits such as Supplemental Security Income or Medicaid. Also, typically the special needs trust funded with the parent’s money prevents the state from seizing your child’s inheritance for medical or residential cost-of-care claims.)

Here are three easy-to-implement tips to instantly give the trustee of the special needs trust the (legally-authorized) agility to react to change:

Consider adding an amendment clause to the special needs trust. In this way, after your death, the trustee will have the authority to amend the trust to comply with changes in the laws.
If you name an individual as a trustee or co-trustee, consider giving the acting individual trustee the power to name successor trustees or co-trustees. For example, let’s say you name your brother or sister (your child’s aunt or uncle) as the trustee of your child’s special needs trust after you die. But you’re hoping that someday one of your other kids when old enough will be trustee. If the trust language permits the acting trustee (your brother or sister) to name successor trustees, then even years after your death, your brother or sister as trustee can name one of your other children to succeed them as a trustee (or as co-trustee with a bank) once your brother or sister believes your “non-disabled” child is old enough and mature enough to handle the job of trustee.
Finally, go over with your attorney (with a fine tooth comb!) the part in the special needs trust that talks about what the trustee can buy for your child with a disability. In general, you usually want to give the trustee as much discretion as possible to meet the changing needs and wants of your child with a disability. Many special needs trusts are unnecessarily restrictive in what the trustee can buy for the child with a disability. Ask your attorney LOTS of questions about what exactly the trustee can buy for your child with a disability.

Special Needs Trust Home Page.