Special Needs Planning: When Children Become Adults
Parents of special needs children need to carefully plan for their children’s future. Many families turn to special needs trusts to ensure their child will have access to finances after their deaths, without hindering the child’s ability to qualify for public benefits, such as Social Security and Medicaid.
Special needs trusts hold assets that can contribute to the cost of a special needs child’s care, comfort and well-being. Children who receive federal or state aid may become ineligible if their family leaves property and assets directly to them via a Will, life insurance or other beneficiary designation. With a special needs trust, parents can appoint trustees to manage the trust after their deaths so that money is available to provide for their surviving child, while maintaining the child’s eligibility for the needs-based programs. The assets in the special needs trust (often called a Supplemental Needs Trust when created by a parent) can be used to supplement the public benefits being received; that is, the money in the trust can be used to provide for goods and services that are not covered by the public benefits programs.
What happens when a special needs child becomes an adult? Children become legally recognized as adults at the age of 18. Employment, bank accounts, and medical decisions become the responsibility of the young adult with special needs unless proper planning takes place. Therefore, if the young adult has the legal capacity, he or she should sign advance directives, such as a Durable Power of Attorney
, Health Care Power of Attorney and Living Will. If the young adult does not have the legal capacity to sign advance directives, the parents will want to petition the court to be appointed guardian. Under North Carolina guardianship law
, the petition can be filed any time after the special needs child turns 17 ½.
The National Organization of Disability estimates 54 million people have special needs in America, and 3 out of 4 adults with special needs are unemployed. Families can plan ahead for the time when their special needs child transitions to adulthood by learning about public benefits programs. There are specific programs available for individuals who are unable to work and for those with low incomes.
A decade ago, just over 20% of children in North Carolina had special needs. Those children are now young adults who need help managing their own finances, housing and medical care. Whether the young adult has the capacity to execute powers of attorney, or whether the parents want assistance in being appointed guardian, families can work with a special needs planning attorney to ensure that the parents are legally authorized to make financial and healthcare decisions on their adult child’s behalf.
Parents who have established a special needs trust should review it as their child approaches young adulthood. Revisions may be in order to ensure their child’s continued eligibility for funding from public programs, Social Security, and Medicaid. A special needs planning attorney will be able to recommend whether important changes are needed to preserve assets for special needs adulthood.
Parents should share this information with anyone who may name their special needs child as a beneficiary of their Will, trust, life insurance or retirement account. Anyone who wants to leave assets to help care for a special needs child should consider either directing the assets to the special needs trust created by the child’s parents, or creating a special needs trust under their own estate plan.