What are some other reasons to leave assets in a Special Needs Trust?

What are some other reasons to leave assets in a Special Needs Trust?

  • June 22, 2015

As mentioned earlier, if you do not implement an estate plan that protects your child with special needs, a judge will impose a plan of his own choosing on the family. To determine whether the judge's plan is likely to be the one you would choose for your loved one, just ask yourself a few questions:

  • Will the judge appoint the trustee I would want to manage the assets I leave my loved one?
  • Will the judge's plan keep my child's financial and legal affairs private instead of making them a public record?
  • Will the judge's plan require that the assets I leave my loved one be distributed to my loved one for only the purposes I want, when I want, and how I want?
  • Will the judge's plan result in the least costs and delays to my family?

You simply cannot ensure that the decisions of some unknown judge sitting in some unknown courtroom at some unknown time in the future will decide things the same way you would. The truth of the matter is that the decisions of many judges would be exactly opposite of how you would conduct your own private affairs.

Unless you designate who will protect your child's assets, a judge will choose for you. The judge, due to open record laws, may allow anyone to rife through the court file and learn the size and extent of your child's assets. There is no guarantee that the judge's plan will provide the same lifestyle that you desire for your loved one. It can take years for cases to go through the stressful, expensive, and time-consuming court bureaucracy. 

If the above listing of the risks of leaving things in the hands of a judge were not bad enough, any plan created by a judge will be subject to the judge's "continuing jurisdiction" over the administration of your loved one's assets. This means that the person appointed by the judge to administer your child's assets must file financial reports with the judge every year for as long as your loved one lives. This not only imposes additional annual costs of administering the judge's plan (at your loved one's expense), but it places one more intrusive and disruptive burden on your loved one.

The judge's plan will also disqualify your loved one from receiving government benefits if your loved one is deemed to personally own the assets. A well-crafted Special Needs Trust written according to your instructions will protect the confidentiality of your loved one's private affairs and preserve your loved one's right to receive government benefits.

As seen, there are many challenges involved with planning for a loved one with special needs, but they are not insurmountable. With experienced counseling and good planning they can be overcome. If you want the peace of mind that comes from knowing you have done everything possible to protect your loved one, then a Special Needs Trust needs to be part of your comprehensive estate plan. 

Visit Our Special Needs Planning Page