Proper Planning for Your Child's Personal Injury Settlement
Here are some important points to consider before finalizing your child's inuury settlement to ensure their?well-being over a...
Read moreA grandparent, aunt, or close friend of the family has written a generous check to your child with special needs or has named the child in a will or trust. Should you be pleased?
Initially, you might be grateful for the assistance. After all, setting aside sufficient funds for your child's lifetime support is no easy task. But if your child receives public benefits, such as Supplemental Security Income (SSI) and Medicaid, the well-intentioned gift or bequest could do far more harm than good. That's because SSI eligibility is limited to those with no more than $2,000 in assets (excluding certain items such as a home or car). If your child receives a gift or inheritance in excess of that amount, he or she could lose public benefits, be forced to use the funds for basic expenses otherwise covered by SSI, and have to reapply for benefits when the funds are depleted, at which time SSI would become the sole means of support.
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Fortunately, this doesn't mean grandparents and other interested parties must simply disinherit your child. Depending on how you have planned for your child's future, for example, whether you have established a Special Needs Trust (SNT) to supplement public benefits, friends and family members can provide assistance in a number of ways. A special needs attorney and financial advisor with special needs expertise can help them choose from the following:
If your child receives a gift or inheritance directly
If you learn too late that someone has provided your child with a gift or taken inappropriate estate-planning steps, contact your special needs attorney to find out what may be done to redress the situation. This is important if a grandparent, other relative or friend does any of the following:
What your attorney advises will depend on a number of factors. For example:
Seeking advice from special needs professionals early on can help everyone involved in your child's life avoid devastating mistakes, choose appropriate wealth transfer strategies and, potentially, even realize tax benefits. Most importantly, coordinating estate planning efforts with the whole family can help maximize the funds available to enhance and enrich your child's life.
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