Wednesday, September 6, 2017

After You're Gone, Will Your Disabled Child Be Under the Arc?

If you have a child or other loved one with a physical or mental disability, a special needs trust may be a critical piece of your estate plan. In fact, here at Geyer & Associates, an estate planning and elder law firm, we support parents of special needs children by:
  • helping them navigate through the complexities of federal and state laws
  • connecting them with resources
One of the biggest concerns parents have, we’ve found, is providing for a disabled child after they themselves are gone. A special needs trust is designed to accomplish four basic things:
  1. Setting out specific directives about the care of your child
  2. Providing for “extras” above and beyond governmental benefits (vacations, electronics, entertainment, special dietary needs, education expenses, even gifts for others)
  3. Protecting your child’s inheritance
  4. Preserving governmental benefits such as SSI and Medicaid.
We often help parents or grandparents set up individual special needs trusts, but also recommend they explore becoming part of a very large pooled trust at the Arc of Indiana. Trust I under the Arc uses an annual spending projection to decide how much money may be spent each year on the beneficiary. The Arc trust is designed to be “self-depleting”, designed to be used up by the time the beneficiary passes away.

Why consider a special needs trust through the Arc? The Arc website lists several important considerations:

  • With an Arc trust, should your child outlive his or her projected life span, the trust will continue making disbursements even though the account is depleted. Those funds come from donations of funds remaining after other beneficiaries died. With a bank trust, if the funds are insufficient to cover the trustee’s fees, the trust might be terminated.
  • Many banks are reluctant to administer small trusts.  The Arc master Trust minimum funding is $30,000.
  • The Arc membership and Board of Directors is comprised of people who routinely interact with people with disabilities and are therefore in a position to be more sensitive to parents’ desires for special needs children.
After you’re gone, will your child be under the Arc?

- by Rebecca W. Geyer

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