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Special Needs

Estate Plan, Option #2
Rely on Family and Government for All Needs

This is the complete opposite of the first plan: here, nothing is left to the special needs family member, either outright or in trust. Instead, the remaining family will contribute to the care of the individual with the special need. By impoverishing the individual with a special need, they become more eligible for government or charitable assistance.

Pros

Receive government resources. Generally, the individual with a special need should qualify for government programs, allowing the family to take advantage of resources, funds or programs that might be lost if the individual had his or her own assets. The remaining family might then supplement the individual's financial needs from their own funds or from the assets received from the parents. This plan is often viewed as the only effective tool for many families. Caution must be exercised as the government may under some circumstances, count family gifts in means testing.

Cons

Dependent on other family members. The special needs family member will depend on other family members for all financial support not provided by the government or charities. Given that this is an informal arrangement, there is no way to be sure that funds will be used to benefit the individual with a special need. There is no way to be certain that the funds will even be there when the individual needs them. Divorce, other family obligations, death, inheritance laws, bankruptcy, judgments and other unforeseen situations can quickly deplete assets.

Government resources need to be supplemented. If the special needs individual is left impoverished, it is more than likely that he or she will qualify for government and charitable programs. However, it would be unwise to rely on those programs for the total financial and physical care of the individual. There's no way to be confident that government or private programs will be available to provide adequate assistance to the individual.

Government programs subject to cuts or run poorly. Will the individual with the special need be able to live as the parents wish, or will institutional care, run and managed by the government, be the only choice? In an era of reduced federal and state funding, what happens if the programs are eliminated or significantly reduced?


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