August 7, 2013   Disability & Illness

Disabled Children and Your Estate Plan—What’s Best?

Disabled Children For the parents of disabled children, estate planning is of supreme importance. Without proper parental estate planning, a disabled child who is unable to live independently may be left extraordinarily vulnerable. Below are some of the more common legal considerations that parents of disabled children should make:
First, select a guardian. A guardian is necessary if your child either has not reached the age of majority, or has been adjudged incompetent. In either situation, parents should carefully select the person or institution that will be able to best care for the child. If parents do not make this designation, they suffer the possibility that the court will select a person or institution that the parents would not have selected.
If you are worried that an inheritance will negatively impact your child’s ability to collect public assistance, consider setting up a Special Needs Trust. These trusts, designed for disabled beneficiaries, allow parents to transfer assets to their disabled child without impacting his or her ability to collect public assistance because the inheritance is owned by the trust.
If you plan to set up a Special Needs Trust, begin by calculating how much money your child will need in order to provide the desired level of care for the expected duration of his or her life. Be sure to factor in your child’s anticipated public assistance payments, and provide for emergencies.
If you do not have the resources or are otherwise unwilling to set up a Special Needs Trust, you may wish to disinherit the child. If you leave your disabled child out of your will completely, he or she will presumably continue to receive public assistance. If you are worried that this may upset your child, consider leaving him or her a token gift.
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One distinction to make is between short-term and long-term disability insurance. Which leads to another question to consider:* Are you likely to become pregnant at any point in the near future?Many companies now have ditched their maternity leave in favor of having their female employees use short-term disability insurance to cover maternity leave. Not a fair trade, because the disability insurance only pays 66% of your regular salary (and you may still have to pay taxes on that 66%).Which then begs the question: how does this shift in corporate practices skew the actuarials? Is this more likely to happen in white-collar versus blue-collar industries?- Tom from

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