Special Needs Planning


It's a daunting task to put together an estate plan for yourself and maybe even a spouse. When you add children to it, it can become more complex. If one of those children has special needs, it's not only more complex but imperative—because you may be their only source of support socially, emotionally, and financially.

At JCloud Law, P.C., our special needs planning lawyer understands how delicate special needs planning can be. Parents worry, and rightfully so. We have solutions, though. Below is an overview of special needs planning. Contact us online or at 480-378-3543 / 858-299-0440 for a free 15-minute consultation to learn more about it and how our legal services can help you and your child with special needs. 

What Constitutes Special Needs?

Special needs is also referred to as “disability,” "handicap,” or “incapacity.” Each term is differently defined by state and federal law. Under the Americans with Disabilities Act (ADA), special needs is cited as a disability, and is defined per 42 US Code §12102 as

  1. A physical or mental impairment that substantially limits one or more major life activities of such individual;
  2. A record of such an impairment; or
  3. Being regarded as having such an impairment.

The meaning of the above definition gets further broken down by the ADA and then narrowed by case precedent. The definition matters if you want your child to get federal and/or state assistance and/or protection. Our estate planning attorney can help you understand what your child may qualify for and how to get it, as well as how to arrange and distribute your own assets upon your death in a way that will best benefit your child.

In the end, though, if your child has special needs––however significant they are or are not––you want to make sure your child is safe and financially stable throughout their life. You can do this through a comprehensive estate plan.  

How an Estate Plan Helps a Child with Special Needs

It's simple, an estate plan can help make sure your child has all the necessities they need. Of course, it all depends on how you put your estate plan together to ensure they have what they need and more. If planned correctly, you can help provide:

  • Money management that benefits the child for their lifetime
  • Protection for public benefits
  • Funds set aside for the future in case public funding is disrupted or restricted

Your tailored-made estate plan can incorporate things like identifying care providers, appointing a guardian, creating a trust and designating a trusted trustee, and finding housing. As such, an estate plan that protects a person with special needs can include documents to create or address:

  • Guardianship
  • Trust
  • Care providers
  • Housing

For many, the most important elements of an estate plan will be the appointment of a guardianship and the creation of a trust.

Appointing a Legal Guardian to Look After the Child

One of the most important aspects of estate planning for parents of children with special needs is choosing a guardian to look after the child once both parents have passed away. This can be done in the parents' last will and testament. If the parents do not make a joint will, however, they should make a point of ensuring that they both name the same person as their child's legal guardian.

  • For underage children, this legal guardian would have many of the rights and responsibilities of the child's biological parents, allowing them to make some of the most important decisions in the child's life. Oftentimes, a close relative will be appointed because the child is familiar and trusts that person.
  • For adult children with special needs, parents can appoint a guardian (AZ) / limited conservator of the person (CA) to make important decisions about the child's medical care and to manage the child's finances.

In either case, parents should choose someone who is trustworthy, reliable, and professional. 

Testamentary or Special Needs Trusts

Children with special needs may not be able to earn a living on their own. Instead, they often rely on their parents for financial security.

Parents can continue to provide that financial security by establishing a testamentary trust or a special needs trust. Both set aside assets from the parents' estate to fund a trust that would be professionally managed by a trustee of the parents' choice. The principal in that trust would create interest payments that can be used to cover the child's ongoing needs and care. Also, in some jurisdictions and if drafted properly, the child may still qualify for public assistance––if desired and necessary.

When selecting the trustee for the trust, you want to consider seriously who you want the trustee to be. If the trustee, like a family member, views the trust's assets as family assets, they may spend the money themselves. In place of a family member as the trustee, you could also consider:

  • An attorney
  • A trust company
  • A financial institution
  • A nonprofit organization with experience
  • A nonprofit organization specific to special needs

You can also opt to have co-trustees where one trustee is a family member and the other is not. There are, of course, pros and cons to all these options, so speaking to a special needs lawyer works in your favor.

Avoid Mistakes with Estate Plans involving Children with Special Needs

When parents have the assets and want to leave them to their children, including a child with special needs, there are a few mistakes often made. 

  1. Disinheritance. Some parents think they should disinherit their child so that the child will qualify for public assistance. Public assistance, however, cannot cover all the necessities the child needs even though it provides great benefits, like vocational rehabilitation, job coaching, shared housing, etc.
  2. Sibling's promise. Some parents think they can simply leave their estate to their other children with the latter promising to care for the child with special needs. Though this option seems promising, there are no assurances, and your child with special needs could suffer because of a failure to properly plan.
  3. Inheritance. Here, parents leave an inheritance to the child, but if it meets a certain threshold, it will negatively impact the child's eligibility for public benefits. If your child needs both to live comfortably, then more strategic planning is necessary.
  4. Taxes. Sometimes, parents fail to consider taxes. Taxes matter, especially when considering if the special needs trust should be revocable or irrevocable because the implications will vary accordingly.

In the end, it is always best to speak to our estate planning attorney to make sure you set up the estate in your child's best interest.

Contact a Special Needs Planning Lawyer in Arizona & California Today

You want what's best for your child with special needs, and we at JCloud Law, P.C. understand what that means. Our estate planning attorney will review your assets, listen to your wants, and provide the best legal options for you so that your goals for your family are met. Contact us by filling out the online form or calling us directly at 480-378-3543 / 858-299-0440 to schedule a free 15-minute consultation today.

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At JCloud Law‚ P.C., we focus on estate planning and asset protection. We are here to listen to you and help you accomplish your estate planning goals in the most efficient manner possible.

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We are committed to answering your questions about estate planning and asset protection issues in Arizona and California. We offer free consultations and we'll gladly discuss your case with you at your convenience. Contact us today to schedule an appointment.