Essential planning for a loved one with special needs

Essential planning for a loved one with special needs

Taking care of a family member with special needs can be a commitment for a lifetime and beyond. A major concern for most families is what the future looks like for the loved one with special needs. That’s why having a definite plan in place can help deliver peace of mind that your loved one will be cared for if their parent or caregivers die.

Every family is different and their needs are unique to them. Knowing where to start a plan to meet the unique needs of a loved one with special needs can seem overwhelming, but there are some basics you should consider for any plan.

Last will and testament

A will is the foundation of any estate plan. Without one, your assets will be distributed according to your state’s intestacy laws. Usually this means that, upon your death, some or all of your assets may be distributed directly to your children.

This may cause your loved one with special needs to be ineligible for government benefits if he or she is your child. Also, the state will determine guardianship of your minor children and of any adults with special needs who are incapable of making medical or financial decisions for themselves.

With the help of an attorney, a properly written will (in conjunction with other estate planning documents), can help ensure that your loved one with special needs is taken care of properly, and by the guardian of your choice without jeopardizing any government benefits or assistance they qualify for. This may include discussion of establishing a trust for your loved one with special needs.

General durable power of attorney for financial affairs

Your loved one with special needs may not be able to make key legal decisions in regards to their future. This may require you to establish a durable power of attorney (DPOA) for that loved one.

A DPOA is a written document that gives another person you entrust with the power to manage your loved one’s financial affairs and property should you become incapacitated. A general DPOA typically allows the person you designate as your agent or “attorney-in-fact” to do every legal act that you could do.

Durable power of attorney for health care

The durable power of attorney for health care is a limited DPOA created solely for the purpose of making health care decisions. It gives your designated person the power to make medical decisions for you when you have lost the ability to do so. This may be necessary when your loved one with special needs requires help with decisions about their health and any medical care.

Now that you have the basics of a plan, planning an estate for a family that includes an individual with special needs requires extra steps  like these to provide for the individual’s future.

Drafting a letter of intent

Your plan should also include a letter of intent. This is not a legal document, but a guide filled with important information about the person with special needs.

It allows you to explain their diagnosis, the individual’s level of functioning, and how you wish for them to be raised (if a child). Also, it provides personal information about the person that makes them unique, like favorite color, nighttime rituals, religious preferences, favorite foods, and special educational or vocational arrangements. This type of document should be reviewed annually and can ease a difficult transition.

Creating a guardianship

A guardian is a person lawfully given the power, and duty, of taking care of a person who is considered incapable of administering his or her own affairs. Designating a guardian and successor guardian(s) is a critical aspect of drafting a will.

An individual with special needs may still need a guardian upon reaching the age of majority. Typically, once children reach the age of majority, they become their own legal guardians, regardless of their ability to manage their lives or financial affairs. If yours is incapable of making medical or financial decisions, you will need to file with the court for legal guardianship.

You will want to give special consideration to who you name as guardian, and power of attorney for financial decisions, as they require different skills.

Providing financial security

Individuals with special needs may require higher out-of-pocket medical and/or educational expenses than those without. Many of the available government benefits are need-based.

If there are assets and/or income in excess of certain dollar amounts owned by an individual with special needs, their benefits may be jeopardized or payback for benefits received may be required.

Planning for the financial security of an individual with special needs should involve consideration of any impact to qualification for government benefits. A special needs trust funded with life insurance may be the right solution.

Next steps

Planning for the future of your loved one with special needs is a big task, and something where outside help can make all the difference.

Contact your Ohio National financial professional today to start planning for your loved ones with special needs.

This provides general information that should not be construed as specific legal or tax advice nor the law of any particular state.  Please seek the advice of a qualified legal or tax professional for your specific situation.

Products issued by The Ohio National Life Insurance Company and Ohio National Life Assurance Corporation. Registered products distributed by Ohio National Equities, Inc., Member FINRA. Product, product features and rider availability vary by state. Guarantees are based upon the claims-paying ability of the issuer. Issuers not licensed to conduct business in New York. Withdrawals and loans may reduce the death benefit, cash surrender value and any living benefit amount.

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