Many people have children with special needs such as Down syndrome, developmental disabilities and even autism at the more extreme ends of that spectrum.
As minors, our children with special needs can be legally cared for very similarly to the way we care for minors without special needs. However, when our offspring with special needs become adults, there are unique challenges that implicate special responsibilities on our parts.
The first consideration as to adults with special needs is ensuring our ability to assist them with decision-making. If the adult is mentally competent as a matter of law, the adult may be able to sign powers of attorney that name family or friends as agents to make decisions for the special needs adult.
If an adult with special needs is not sufficiently legally competent mentally to sign powers of attorney, parents or other family members should undertake a guardianship proceeding to become a legal guardian of the adult with special needs. Becoming someone’s guardian is a formal process that typically includes background checks, classes, formal applications and hearings in the local probate court. On a county-by-county basis, some of the education requirements may be waived for parents who attempt to become guardians of adult children with special needs.
The second consideration concerns what to do with parents’ post-death gifts when it comes to adult children with special needs. This consideration is also applicable for adult children who may become physically disabled (for example, simply in a nursing home themselves) before their parents die.
Essentially, the question boils down to how to provide some financial benefits to adult children with disabilities while not having those gifts simply serve as a reimbursement to Medicaid and other government assistance programs.
There are various methods of addressing this second consideration of post-death asset distribution in the context of adult children with special needs.
First, some people will simply disinherit their adult children with special needs. Typically, the parents will have one or more serious, firm conversations with their other children, impressing upon those other children the moral imperative to financially “look after” their special needs sibling. This method can sometimes be workable. However, its subjectivity can cause misunderstanding and hard feelings, especially when there is more than one adult child who is not disabled. And, often special needs adult children are aware enough to recognize and feel a sense of disappointment in learning that they were treated significantly and substantively differently than their siblings.
Second, parents can establish a special needs trust either as a stand-alone tool or as a component tool in a basic revocable living trust. A special needs trust that will distribute assets that will not simply be reimbursement to Medicaid and other government programs must be prepared with very precise language and components.
An effective special needs trust has numerous requirements, usually including a rule that disinherits the beneficiary (the special needs adult in this instance) if the assets in the trust are considered “available” for purposes of Medicaid or other government program eligibility.
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at Lee@LeeSchroeder.com or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.