On August 1, 2012

Parents of special needs children will obviously face different issues raising their children. Among these issues is how to plan for the child’s care once the parents pass on. Estate planning is a necessity for Colorado parents with special needs children.

When a child is born with a disability, such as cerebral palsy, parents must take into consideration the rising costs that will accompany the disability as the child and the parents age, and are possibly no longer around to care for the child.

Establishing a trust for the child’s benefit with assets that would be sufficient to help to care for the child would be ideal. This is known as a special-needs trust. In such a case, a trustee or several people who are designated as a group of trustees can administer such a trust for the benefit of the child.

One set of parents considered this when their son, who has cerebral palsy, was five-years-old. At that time they realized they needed to figure out how to pay for expenses related to his disability. They decided to establish a special-needs trust for their son. He is now 11-years-old and the parents are continually monitoring his health and care needs. This is because they want to ensure that the trust will be sufficient to pay for their sons expenses after they pass on. This is why they have added life insurance benefits designated to flow through to the trust upon their passing.

This is one example of how p roper estate planning can help to safeguard these most vulnerable individuals as their parents age and are no longer able care for them.

Source: The Wall Street Journal, “Build a Financial Plan for Special-Needs Child,” Rachel Louise Ensign, July 28, 2012

Categories: Estate Planning

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