New York parents may worry about the future of a special needs child, especially as they consider the life that child will lead after they are gone. An estate plan can help in preserving assets to address those needs, but failure to plan carefully could leave decisions and financial matters in the hands of the court system. Fortunately, some estate planning tools can help in minimizing these risks.
One of the most important interests in creating a sound plan for a special needs individual is ensuring that the plan will be adequately funded. A life insurance policy can be helpful for providing for future needs, and initiating such a policy at an early age allows parents to keep the costs of such a policy to a minimum. Additionally, the proper type of plan is important. In many cases, a trust can be listed as the beneficiary of such a policy. However, a separate trust might be appropriate if there would be negative estate tax implications with the parents’ estate.
Careful selection of those overseeing financial matters for a special needs child is important. It is best to appoint an individual with an understanding of trust-related laws and concerns. Additionally, it is wise to avoid placing expectations on that child’s siblings to shoulder financial responsibilities for their care. Although intentions might be noble, life changes for a sibling could interfere with their ability to help at a later date. Privacy is particularly important for vulnerable individuals. Because wills tend to be publicized, the use of a trust tends to be more appropriate for handling these details.
Circumstances can change, which makes regular reviews with an estate planning lawyer important. This allows changes in life situations to be integrated into an existing plan and also enables adjustments to be made in light of changing tax laws.