While leaving a legacy for your loved ones special needs children families have much higher concerns. Considering the support required by the special needs child and requirement for other family members, especially when there is a second child, the absence of an effective estate plan can throw up many challenges. The living expenses of the child for his/her lifetime, appointment of a suitable guardian, equal distribution of assets among siblings, meeting other family members requirements and many such concerns comes at the centre stage.
Not having an estate plan can create more issues when family members have to get involved in legal process to claim the assets. With special needs child the legal hurdles can be more if the assets are passed on to him/her directly. Due to these factors involvement of a Will and a Trust is an important element in estate planning for such families.
Below are some of the concerns which you as a parent of special needs children have to address while creating your estate plan:
Identify Financial Requirement
Requirement of your special needs child has many elements viz living expenses, therapies, special schooling, housing etc.. All these expenses will be incurred even when child reaches at his/her later stage of life i.e. when he has grown to an adult or at old age. The amount of money involved will vary, probably may get reduced at higher age but in no way can be ruled out considering a higher inflation. Similarly there will be stages in life of your special needs child when the changes will happen with respect to his therapies or education such as moving from a minor to an adult and then to a higher age. Unless you are well aware on the financial requirement at these stages of life it is difficult to decide how much financial support you need to provide to meet your child requirement. So the first step in creating an effective estate plan is to identify the financial requirement of your special child.
Avail Government Benefits
There are some government benefits available to special needs children families.Parents can claim for regular expenses under Secr 80DD, separate tax file for special child as a minor which helps to save tax on investment returns, a defined pension for the child and many more. Although these benefits may not be adequate but in some situations can be advantageous. Also, if in future the support increases you will benefit from the enhancement. Identify all such benefits which can be availed for your child care.
Plan Managing Your Estate
When you leave a higher legacy then it has to be manged wisely to ensure it can produce the desired money for your child care. You cannot just leave any property or cash surplus to your child. A trust need to be created which will manage the assets and generate the income. How these assets will be managed and how the distribution will take place is something which you can specify in the trust deed. Along with this appointment of the right trustees is also necessary. Although it is easier said than done but by making provisions in the trust deed you can ensure undue advantage is not taken. A wiser approach would be to create a trust in your living and appoint future trustees as co-trustee so that it gives enough time to make them understand the functioning of the trust.
Plan For Siblings Share
Parents with siblings of special child has to take care of major issues. They need to ensure the siblings needs are also addressed. When major time and money goes to the special child there are higher probability of a feeling of being neglected gets developed in the second child. If you have given a thought of making your second child the care taker of the special child after you then the discussion with the sibling is necessary. Also while leaving your legacy you need to ensure the sibling gets his/her share. In case more is given to the special child then there should be a detailed discussion with your second child as to why it is being done. In general the discussion between parents and children about estate planning is low but the situation is different when you have a special needs child. Much can be addressed when there is a fair discussion among family members about your situation and the future.
5. Identify Members Requirement
While planning for distribution of your estate after your death you have to take care of all your family members requirement. Much like you calculate financial needs of your special needs child the needs of other family members should also be identified. This will ensure you are well aware about your family member requirements and if your special child need more resources then from where these resources can be funded. In case some family members are going to get less then the situation should be discussed among the members for their consent so that after you there is no dispute.
Estate planning is a highly critical issue. With special needs children the distribution of assets has to be planned carefully so that needs of other family members are also addressed. Instead of leaving it to them its wiser to identify the requirements and plan your assets distribution accordingly.