As your autistic child transitions into adulthood, you will need to address two very important legal issues: guardianships and special needs trusts. Once your child reaches the age of majority, you must consider whether a guardianship is appropriate. Further, regardless of the age of your child, it is essential to update your own estate plan to ensure your child’s well-being long after you and your spouse are gone.
Guardianships
When your child reaches age 18, you, as the parent, must take action in order to ensure that you can assist your child with medical, financial, and personal decisions. If your child has sufficient capacity, he or she can, and ought to, execute documents, including a will, living will, and powers of attorney. While it is important for everyone to have these documents in place, it is especially important for your special needs child. He or she can name you or another loved one as his or her agent to make decisions in the case of a medical emergency and/or to assist him or her with routine financial and personal decisions. An attorney who specializes in special needs can assist you in determining if your child has capacity to execute these documents.
If your child does not have sufficient capacity, a guardianship will be necessary. Once your child turns 18, you no longer retain the legal right to make the decisions that you have been making for your child up to this point. This situation can be rectified by establishing a guardianship, which is a protective arrangement established by the court system on behalf of an incapacitated individual. In many cases, this process can be simple for parents of children on the autism spectrum, but it is essential in order to ensure that safeguards are in place for your child. As parents, you can request that a court appoint one or both of you as guardians of both the person and the estate of your child, so that you can make medical decisions as well as control your child’s financial assets and deal with advisors, organizations, etc. on your child’s behalf. There are two types of guardianships, plenary and limited. A plenary guardian has control of all decisions concerning your child’s person and estate. Alternatively, a limited guardianship may be established, which reserves certain decision-making to your child. The type of guardianship that is established will depend on your child’s level of independence and capability.
It is also important for you and your spouse to make sure that your wills name your choice of a successor guardian for your child in the event that you both pass away during your child’s lifetime. Even though the named person still has the opportunity not to accept the guardianship, you can at least make known your wishes for your child.
Special Needs Trusts
Most parents worry about the well-being of their children once both spouses have passed away. This concern is especially well-founded for parents of special needs children. You hope to provide for your child throughout the course of his or her lifetime, even if you are gone. Leaving an inheritance outright to a child with special needs is not the best way to achieve this goal because doing so will jeopardize your child’s eligibility for any governmental benefits he or she may be receiving. If you leave assets outright to your autistic child, he or she will lose income- and asset-based benefits, at least for a certain period of time. For example, in order to receive Medicaid benefits, your child cannot have more than $2,000 of countable assets in his or her name. Your child must utilize any assets in his or her individual name (including inherited assets) for all medical and personal expenses, etc. until those assets have dwindled to $2,000.
In order to avoid this result, parents and loved ones often establish a third-party special needs trust, which is a mechanism through which you can make funds available in order to enhance your child’s quality of life while still allowing your child to remain on government benefits. A special needs trust supplements public benefits, such as Medicaid and SSI, without jeopardizing eligibility. The trustee has absolute discretion to expend funds from the trust to purchase things for your child that are not otherwise covered by Medicaid. You can also designate to whom any remaining trust assets will pass upon the death of your child, whether to your other children, relatives, or a charity.
It is also extremely important to inform your relatives about the existence of this special needs trust. Grandparents and other relatives may wish to provide for your child through their estate plans. If they leave money outright to your child, the same issue with benefits eligibility can arise. Instead, these other parties can make lifetime gifts or leave inheritances directly to your child’s trust in order to make sure your child’s benefits are preserved.
If your child has already received certain assets outright, a different type of trust can be established, a self-settled (or first party) special needs trust. This type of trust must be established by a parent, grandparent, legal guardian, or the court, but it will be funded with your child’s own assets. This type of trust is less advantageous to your child because it must include a Medicaid payback provision. This means that upon your child’s death, the remaining trust assets must be paid to Medicaid. However, such a trust can enhance your child’s quality of life during his or her lifetime much in the same way as the third-party special needs trust.
It is important to start planning now for your child’s future. Depending on your child’s unique situation, one or more of the techniques discussed in this article may be utilized. It is important to consult with an attorney who has expertise in both special needs and estate planning in order to ensure the well-being of your child.
Susan M. Green is an attorney with Begley Law Group, P.C. in Moorestown, New Jersey. Begley Law Group, P.C. specializes in planning for disabled individuals and families. The firm’s services include, but are not limited to, estate planning, special needs trusts, and guardianship proceedings. To contact Susan M. Green, please call 856-235-8501 or visit the firm’s website at www.begleylawgroup.com.
