Colorado parents who have children with special needs may want to consider certain estate planning tools. For many families, a trust is the right vehicle to provide for kids with special needs.
Wealthy families who know their children will not need to receive government benefits can simply create a trust that has enough funds. For example, a trustee can be placed in charge of a discretionary trust. The income and principal can be used to support the child.
Parents who want their children to remain eligible for government benefits can create a special needs trust. With this kind of trust, the trustee can pay directly for perks, such as outings, without endangering the benefits. Some parents may want to prepare for both possibilities (with and without government benefits). In this case, they can create a structure that allows a trustee to create a special needs trust when the parents die if it is necessary.
Trusts may be a better solution than leaving assets to siblings with the expectation that they will care for the child. This does not guarantee that the siblings, who are under no legal obligation, will do so. Furthermore, if a sibling gets a divorce or has problems with creditors, the ex-spouse or the creditors could seize the assets.
An attorney could explain the options for estate planning when children have special needs. It is important that the family choose the right individual as trustee. This should be someone who is responsible, organized and capable of managing family dynamics. Depending on the complexity of the trust, the parent may want to pair a family member with a professional as co-trustees. This could help ensure that the trust is managed with financial and legal expertise.