A Letter of Intent is a document that goes hand-in-hand with a Special Needs Trust or a Supplemental Needs Trust. Also known by the names “Plan of Care,” “Memorandum of Care,” and “Memorandum of Intent,” the purpose for writing a Letter of Intent is to provide instructions and information to new caretakers when a person with special needs is transitioning out of the direct care of a parent or legal guardian. Since the parent or guardian is the ideal source of details about a beneficiary’s specific needs, preferences, and personality traits, writing a Letter of Intent is key for preserving the beneficiary’s quality of life.
As you can imagine, Letters of Intent often take some time to write because there is much information to record. Not only should the names and addresses of doctors, financial advisors, and close family members be provided, it is also crucial to include the Beneficiary’s favorite foods, entertainment preferences, daily habits, future goals, and friends. Making this information available will help enhance the Beneficiary’s ability to adjust to the change of scenery and caretaker. It will also assist the new caretaker with supplanting a personal connection with the Beneficiary. Since Letters of Intent are not legal documents and do not need to be notarized, keep in mind that they are malleable. A Letter of Intent should be edited and re-printed as the Beneficiary’s needs and preferences evolve. Remember, if you are the guardian, review the Letter of Intent with the Beneficiary and other members of his or her network of support on a regular basis and make sure that the most current edition travels with the legal documents.
For more information about Letters of Intent and transitions of care for your child with special needs, consult an attorney or visit www.pacer.org and www.thearc.org.
Parents and guardians of children with special needs can do everything perfectly from qualifying their child for government assistance, to establishing a trust, to ensuring that their daily needs are fully met. However, not having a legal Will in place may jeopardize much of the effort that you and your family invest into the care for your child.
When somebody without a Will passes away, the government determines how the estate is distributed. If the decedent is not survived by a spouse but is survived by children, the assets will pass to the children. If one or more of these children has special needs and has been receiving government benefits, assets from the estate provided directly in the child’s name may disqualify them from receiving the public assistance funding.
This is why having a legal Will in place is crucial. The Will can be used to designate any distribution from the estate for the benefit of a special needs child to be put in a Supplemental Needs Trust. Not only will executing a Will go a long way in preventing government involvement with estate distribution, it can assure that assets will be provided to your child with special needs in a way that will not affect his or her qualification for public assistance. The key is to make sure that you do not leave money directly in the child’s name. The distribution should instead be made to the Trustee of the child’s Supplemental Needs Trust. Along the same lines, be sure that the portion of your life insurance proceeds to be paid out for your child with special needs is held in the trust, as well. Remember, you should consult with an Elder Law attorney to discuss the best way for your Will to be drafted according to your unique situation.
For parents of a child with a disability, it is important to establish a Supplemental Needs Trust when their child is still young. Even though eligibility for many government assistance programs does not begin until a child is at least 18, it is beneficial to establish a trust before the child is old enough to qualify because it is a preemptive measure that goes a long way in protecting the child’s future.
One major benefit of establishing a Supplemental Needs Trust at a child’s young age is providing a destination for gifts. Once the trust is created, family members may begin providing funds for the trust and designating it as the recipient of an inheritance. This way, collection of trust funds may begin early in life, and the child’s eligibility for government benefits will not be jeopardized should he or she receive a large gift later in life, whatever the age of the Beneficiary.
Another reason for establishing a trust while the child is young is that it provides parents with peace of mind that the child’s needs will be met if something were to happen to them. Having assets secured in a trust ensures that there will be funds available for the child if it is ever unexpectedly needed. In conjunction with establishing the Supplemental Needs Trust, many parents choose to execute their own estate planning documents, which grant assets such as money, stocks, and even a home to the trust. In addition, they may purchase a life insurance plan to be held in the trust. Following these steps are a great way to maximize the amount of funding available to a child with special needs. For more information about establishing a Supplemental Needs Trust for your child, be sure to consult with an attorney in your state who specializes in Special and Supplemental Needs Trusts.