Estate planning as a parent of an adult child with special needs

On Behalf of | Apr 24, 2024 | Estate Planning

Becoming a parent is often what motivates people to create estate plans. They worry about the vulnerability of their children while they are still young. A parent can leave assets for their children with a will or a trust, and they can also nominate a guardian in a will.

For most parents, estate planning concerns significantly diminish when their children become adults. That isn’t necessarily true for those who have adult children with special needs. Some children may never be able to live independently and rely on their parents to provide them with the support and resources they need for safety and stability. As such, parents of adult children putting together or revisiting their estate plans need to address certain specific issues.

Government benefits

One of the biggest issues for an adult child was special needs is their ability to access government benefit programs. From subsidized housing programs and health insurance coverage to benefits that can cover adult enrichment activities and provide supplemental income, there are many benefits that can make semi-independent living a realistic prospect for an adult with special needs.

A lump-sum inheritance from their parents would very likely eliminate someone’s eligibility for most if not all of those benefits. Proper estate planning for the parents of an adult with special needs may include the creation of a special needs trust. A trust can offer financial support to someone who is incapable of supporting themselves without making them ineligible for government benefits that they rely on currently.

Social support and abuse

Someone putting together an estate plan as a parent of a child with special needs may hope to provide social and emotional resources in addition to financial support. Naming someone to act as a guardian can be important if an adult child with special needs still lives with the family.

That new guardian could potentially take over the parent’s role of managing an individual’s day-to-day life. The trustee or successor trustee named to manage the special needs trust can also provide crucial support to a vulnerable adult with special needs. From overseeing their financial matters to guiding them in personal decisions, a trustee can have a very positive impact on someone’s life, especially after they have lost their parents.

Unfortunately, a large inheritance might put a vulnerable adult with special needs at risk of financial abuse. Including protective provisions in an estate plan, including the creation of a trust, can diminish the incentive for others to manipulate an individual with special needs for financial gain.

It can be very challenging to establish an effective estate plan and a special needs trust when someone hopes to address the needs of a loved one with special needs. Learning more about the unique demands of the situation may help parents support their adult child with special needs and feel comfortable about what may happen after they die.