For families with special needs children, estate planning can be rather complicated. This is because the usual estate planning instruments may not address the unique needs of a special needs child and can even jeopardize their access to government benefits. Here are essential considerations when drafting an estate plan.
Determine who the child’s legal guardian will be in the event that you are incapacitated. You can also express your wishes for the child’s future and let the guardian know what to do if you are unavailable.
Government benefit programs for special needs usually have strict asset limits. This means children who have access to assets above the set limits can be disqualified from accessing critical benefits. A Special Needs Trust (SNT) is a legal arrangement where designated assets for the child are held by a trustee and not directly by the beneficiary. The primary purpose of SNTs is to prevent disqualification from government benefit schemes. As such, the assets under the trust cannot be used to pay for basic needs like food and shelter. However, trustees can use the assets to improve the beneficiary’s quality of life by providing for things like travel, recreation, equipment, and entertainment.
It is not advisable to take a life insurance policy for a special needs child. Means-tested benefits typically look at a beneficiary’s total assets to determine eligibility and would consider the surrender value of the life policy as part of the child’s assets. Instead, consider having the child as a beneficiary in a policy owned by a parent or guardian. Alternatively, name the child’s Special Needs Trust as the owner and beneficiary of the policy.
At O’Brien Law Firm in Southaven, MS, we understand the intricacies involved in legally safeguarding the future of special needs children. Our attorneys are ready to help you through the entire process and ensure your child’s well-being is protected when you are gone. Call us today to book a free consultation with one of our lawyers.
Losing a job is one of the most devastating things that can happen to anyone. Some people are able to find a job within a few months and avoid financial ruin. But what if you remain unemployed for six months or more? Worse still, what if you were already in a financial predicament before you were laid off? In such a case, you may consider filing for bankruptcy to get some relief from your creditors.
Bankruptcy procedures are primarily regulated by the U.S. Bankruptcy Code. However, most states have their laws to supplement the federal code and outline the specific guidelines to follow while filing for bankruptcy. That said, there are two main forms of bankruptcy you can file for:
The type of bankruptcy you will be able to file for when unemployed will depend on your financial situation and how much you are willing to lose. If you have little to no income, it may be much easier to file Chapter 7. However, you stand to lose some of your assets and also take a substantive hit on your credit score.
Chapter 13 has stricter requirements as it requires you to have a regular source of income to honor your repayment plan. However, it allows you to keep most of your assets, and the effect on your credit scores will be relatively minor.
Bankruptcy laws are quite complex, and it may be frustrating to navigate through the complexities while dealing with a personal financial crisis. Fortunately, our attorneys at O’Brien Law Firm in Southaven, MS, are here to help. Talk to us today!
