ESTATE & LIFE PLANNING TIPS

Important life planning tips that will ensure that your loved ones are ok long after you are gone

• Goals of Estate Planning
• Difference between Wills & Trusts
• Benefits of Pre-Planning your Celebration of Life
• Putting your Affairs in Order
• Important Decision & Planning When You’re Caregiver

A conversation with my loved ones…

This is not an easy conversation to have with those that you love. And because I consider each of you to be a part of my village, this conversation may be hard but it’s important and there are things that I want to share with you that will hopefully make the inevitable easier when that time comes. And for so many of you, you’ve already dealt with the loss of a loved one and know what that feels like, the panic, the pain of loss, the confusion about what comes next, and what to do now….

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Can you imagine what it will be like when our time comes, how do we prepare those left behind , how do we take care of them when we are no longer here…. The key is to start planning now, by putting your affairs in order. If the last couple of years of insanity has not taught us anything, tomorrow is promised to no one…. ~ Much love ~ Jackie

Three Goals of Estate Planning

1. Manage your affairs during your lifetime

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• Distribute your estate after death.

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• Minimize problems for your loved ones.

What is Your “Estate”?

All the assets you have accumulated:

• Real Estate
• Bank Accounts
• Investments
• Personal property (jewelry, vehicle, furniture, silverware, cast iron pans ☺)
• Interest in a business
• Assets you control.....Life Insurance, LLC or Corporation, Retirement Plans

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Why Do You Need Estate Planning?

• To make your wishes known related to who is to receive your assets. Who will administer your estate, who will serve as guardian of your children.

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• To make your wishes known in a Physician’s Directive (also known as a Living Will) related to life sustaining treatment decisions with other provisions.

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• To have a Power(s) of Attorney to address issues while you are living related to financial and health care matters.

Estate Planning Documents Explained

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When I first arrived at at my attorney’s office I knew very little about Estate Planning. I knew wills existed but I had no idea about the seriousness of them or how incredibly useful everything included in the Estate Planning bundle is. I'm here now to explain, in laymen's terms, what each document is and what it does.

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-Last Will and Testament - This is the one everyone knows about. This allows you to express your wants and needs after passing. For example, burial instructions and how to distribute your estate.

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-Durable Power of Attorney - This is also commonly known. This document lets you appoint someone to make decisions for you in legal or financial matters. You specify what power you'd like someone to have. This one does not terminate if you become mentally incapacitated. It is effective immediately after execution.

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-Health Care Surrogate - this document allows you to choose who to authorize to make medical decisions for you when you are unable to.

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-Living Will - This helps you state your wishes for end-of-life medical care. For example, if you want DNR (do not resuscitate) measures in place. This is also sometimes called an advanced healthcare directive.

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-Pre-Need Guardianship - a PNG lets you select who you would like to take care of you incase you are ever in need of a legal guardian.

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Estate Planning: Options & Terminology

1. Intestate (no planning at all)
2. Powers of Attorney
3. Health Care Directives
4. Beneficiary Designations
5. Jointly Held Assets
6. Will
7. Living Trust – Revocable and Irrevocable

Intestate (No planning at all)

• If you die without a will, it is called “dying intestate” or “intestate succession”.

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• Each state has designated, by statute or state law, how your estate will be distributed.

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• This may leave issues for your spouse depending on how your assets are held.

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• If you have minor children or special needs children/adults , it will not address who you want to care for them or handle their financial affairs.

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• It could impact benefits of a special needs child.

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• It will not address who you want to administer your estate if probate is required.

Powers of Attorney & Health Care Directive

*Powers of Attorney

• To handle your financial and property matters

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* Health Care Directive

• To make medical decisions for you
• It designates someone to work with doctors, if you become incapacitated.

Jointly Held Assets

• Assets held in the names of two or more people

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• Assets held with right of survivorship pass automatically to the survivor upon the death of the first person

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• Avoids probate in some situations

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• Carries some risk in other situations.

Beneficiary Designations

• If certain assets are set up to pass outside your estate, the assets pass regardless of the provisions in the will

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• Probate may not be needed for assets with beneficiary designations or setup otherwise to pass outside your estate

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• Examples:
• Pay-on-death or Transfer on Death accounts
• Transfer-on-death or Beneficiary Deeds for real property
• Beneficiary designations for life insurance, investments, pensions and retirement accounts

Last Will & Testament-What you need to know

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Why you need a will

• As important as a trust is, you also want to have a will.
• While your big-ticket assets, such as a home, should be owned by your trust, you likely have other smaller keepsakes –a china collection, watches etc.. – that you want to give to a specific person. A will is where you spell this out.
• A will is also where you can write down your funeral wishes.
• If you have young children or you’re a caregiver for an adult with a disability, you must, must, must have a will. A will is where you appoint a guardian for minor children or an adult with a disability.
• You love your family more than anything, right? Having both a will and a trust is a powerful way you show your love. It will save your family time and money. And the heartache of squabbles if you were to die and not leave clear instructions on who is to get what.

WILLS

• Wills  - The most common type of will is called a testamentary will. It is a legally enforceable document stating how you want your affairs handled and assets distributed after you die. It can also include a directive of how you want your funeral or memorial held. A will is an important component of estate planning, and a number of online will makers offer tools for generating legal forms and documents. Experts suggest seeking legal counsel from an attorney that can take into account your individual estate-planning needs.

What if I Die Without a Will? 

• If you die without a will, called intestate, the state gets involved, and it will oversee the distribution of your assets. If you have minor children and die intestate, the court will appoint a guardian. Besides, the courts follow a set formula of how to divide assets, and it could result in actions that could negatively impact a surviving spouse or child.
• A will protects survivors against estate tax liability as well. As of 2021, U.S. estate tax returns are required to be filed if your estate is valued at $11.7 million ($11,580,000 for 2020).³ If your estate is worth less than this figure, there is no tax return required, and you will not be charged an estate tax.

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* If you die intestate (without a will), what happens to your property, bank accounts, securities, assets, and even the guardianship of your minor children will be determined based on the intestacy laws in your state. It can lead to long court battles and financial hardship for your loved ones.

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CAN MY DIGITAL ASSETS PASS THROUGH MY WILL?

ARTICLE 14.          DIGITAL ASSETS

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The Personal Representative hereof shall have the power to (i) access, use and control my digital devises, including but not limited to, desktops, laptops, tablets, peripherals, storage devices, mobile telephones, smartphones, and any similar digital device which currently exists or may exist as technology develops or such comparable items as technology develops for the purpose of accessing, modifying, deleting, controlling or transferring my digital assets, and (ii) access, modify, delete, control and transfer my digital assets, including but not limited to, my emails received, email accounts, digital music, digital photographs, digital videos, software licenses, social network accounts, file sharing accounts, financial accounts, domain registrations, DNS service accounts, web hosting accounts, tax preparation services accounts, online stores, affiliate programs, other online accounts and similar digital items which currently exist or may exist as technology develops or such comparable items as technology develops.

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Some Examples of Digital Files That Do Not Pass Through

Any accounts that you DO NOT OWN or have the right to transfer at death…

• Your email and social media accounts
• Non-transferrable domains that you have licensed
• Subscriptions like Netflix or Spotify
• Apps on your phone or tablet and their data

Why Does Your Executor Need Access to Your Digital Assets?

• To contact your friends and colleagues
• To pay your bills
• To follow any instructions you leave about the handling of your digital files or online accounts

How To Give Access to Your Executor

• In a detailed letter with your clear instructions and access information for your digital accounts (logins and passwords). **Kept in a safe place.**
• Invest in a program that will keep this information.

Doing this will help your loved ones follow your wishes and make it easier to wrap up your estate!

Difference between Wills vs. Trusts

A WILL is a legal document that spells out how you want your affairs handled and assets distributed after you die.

A TRUST is a fiduciary relationship in which a trustor gives a trustee the right to hold title to property or assets for the benefit of a third party

• Using a revocable living trust instead of a will means assets owned by your trust will bypass probate and flow to your heirs as you've outlined in the trust documents. A trust lets investors have control over their assets long after they pass away.
• The difference between a will and a trust is when they kick into action.
• A will lays out your wishes for after you die.
• A living revocable trust becomes effective immediately. While you are alive you can be in full charge of your trust. And when you become incapacitated or die, the person you appoint as the successor trustee can easily step in and handle your affairs exactly as you have laid out in the document.
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• When it comes to protecting your loved ones, having both a will and a living revocable trust. is essential.

What you need to know -Trusts

There are many types of trusts. A living revocable trust is the right trust for the vast majority of you. Let’s take this word by word:

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• Living: A trust is effective during your lifetime.
• Revocable: Everything you state in the trust can be changed. At any time. That’s what revocable means. So relax. This is a legal document that you can change as your life changes.
• Irrevocable - the terms cannot be modified, amended or terminated without the permission of the grantor’s named beneficiaries. Downside it’s not changeable. You no longer own the assets you’ve placed in the trust.
• Trust: Once you create a trust you can move the ownership of key assets –such as a home and other property – into the trust and appoint yourself as the trustee, meaning you call all the shots on how to use and manage those assets while you are alive.
• It is important to understand that if you only have a will, when you die your family may have to go through a lengthy court process to have the right to follow what you laid out in your will. This is called probate. In addition to being time-consuming and costly (you likely will need to hire a lawyer) it is also public. When you die with only a will, that document must be filed with the court, and can be accessed by anyone.
• Smaller estates may be able to avoid probate if the deceased only had a will; but in most states, the cut off for what amount qualifies for a “simplified” probate is low. (You can learn more about your state’s simplified probate rules.)
• The surest way to avoid probate is to have a trust. A living revocable trust does not need court approval. Everything stays private, and your successor trustee can take over its management immediately upon your death.

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Trusts

• A trust is another method of estate transfer—a fiduciary relationship in which you give another party authority to handle your assets for the benefit of a third party, your beneficiaries.

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• A trust can be created for a variety of functions, and there are many types of trusts. Overall, however, there are two categories: living and testamentary. A will can be used to create a testamentary trust. You can also create a trust for the primary purpose of avoiding probate court, called a revocable living trust.
• Living Trust  - Let's focus on a revocable living trust for estate transfer. Like a will, a trust will require you to transfer property after death to loved ones. It is called a living trust because it is created while the property owner, or trustor, is alive. It is revocable, as it may be changed during the life of the trustor. The trustor maintains ownership of the property held by the trust while the trustor is alive.

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• If you have a child with a disability you should consider also creating a Special Needs Trust for them. This way any assets that you leave them will be protected and not cause them to go over the $2,000 limit that might cause them to lose their disability benefits.

One Problem Easily Solved

Why don’t most people have a will or trust?

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• Procrastination
• Don’t feel they need one
• Feel it’s too expensive

Three Estate Planning Challenges

• Finding the Right Attorney
• Getting it Done
• Choosing the right options for you and your loved ones

Leave A Lasting Love Letter To Your Family

Get Your Will/Trust Done Today, not Tomorrow…

END OF LIFE CELEBRATION

A NEEDED CONVERSATION & PLAN

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Why Preplan your funeral ?

• The average cost of a funeral doubles over a 10 year period, the longer you wait the more it will cost. National average of a traditional funeral with ground burial runs around $15,000 per person. Best to lock in your prices now.
• Yes you may have life insurance to help cover the cost of your funeral but by selecting a funeral home and locking in your contract you freeze the price of your final expenses, and most programs offer small insurance policies attached which can pay off your funeral if something happens prior to you paying it off. Also keep in mind that your loved ones still need to live after you are gone , so any extra funds can help them during this difficult time.
• The goal of preplanning your end of life arrangement is to take the stress off of your loved ones, both the emotional planning along with the financial responsibility. And most importantly to make sure that your wishes are carried out.
• The end of life celebration that we plan can range from a traditional funeral service with a casket present during the service, ending with a ground burial or crypt placement; to a traditional funeral with a rental casket present during the service, ending with cremation and placement of urn at home , jewelry, or cemetery ground space or cremation niche; or you may choose to have a memorial service without a casket, followed by cremation and placement of the cremains. All of which depends on your preference and that of your loved ones. Also keep in mind that cremation is the final disposition of the body, same as burial. The question is what type of celebration of life of do you want and type of service sill your loved ones need.

End of life celebration cost

• The average cost of a traditional funeral is between $6,000-$15,000 depending on what state you live in and the cost of the casket selected, that does not include cemetery cost. Benefits of a local funeral home is that they tend the be less expensive than national or regional brands. Whereas national brands may offer a larger network and an ability to transfer property if your life circumstances look change. Also know your rights, funeral home regulations give your loved ones the right to transfer your funeral to any funeral that you
• Traditional Burial with ground space average around and additional $5,000-$10,000 including the opening/ closing of the grave and headstone, whereas if you decide on an above ground crypt you could be look closer to $15,000 per person. Average total cost of a traditional funeral with burial cost run between $12,000-$20,000
• Memorial Service with a Cremation with a rental casket averages about $6,000; and the placement of an urn in the cemetery niche or ground average $2500
• Memorial Service without the body present is the least expensive option, averaging about $1500. And you could still choose to have the urn placement in the cemetery niche or ground average $2500

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Putting your affairs in order

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1. Gather Important Documents and Contact Information.

Property deeds, vehicle titles, official certificates (birth, marriage, etc.), the contact information for your attorney, insurance broker, doctor—all of these are things you can gather and put in the same, safe place now to make it easier for your loved ones later.

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2. Execute a Last Will and Testament.

A Will is one of the most important estate planning documents you can have, as it details where you would like your property to go after your death.

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3. Complete a Living Will or Advance Directive.

A living will or advance directive is a legal document in which you name someone to communicate with medical personnel regarding your treatment preferences should you become incapacitated or otherwise unable to express your preferences yourself.

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4. Put in Place a Power of Attorney.

A durable power of attorney allows you to name someone to be in charge of making decisions for you if you become incapacitated.

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5. Establish a Living Trust.

A living trust can be a great way for you to make sure your wishes are followed after your death, as well as providing for fast distribution of your assets to beneficiaries, avoiding estate taxes and keeping your financial affairs private. An irrevocable trust can also serve as asset protection, to protect your property from being touched by creditors or lawsuits.

Putting your affairs in order

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6. Update Your Beneficiaries.

If you have life insurance, retirement accounts, pensions, or pay-on-death (POD) or transfer-on-death accounts, make sure your beneficiaries are up to date, as these accounts transfer according to their beneficiary designations; your last will does not control them.

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7. Secure Your Digital Assets.

Along with online bank, investment, and shopping accounts, many people also have social media accounts that need handling upon the death of the owner.

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8. Plan Final Arrangements.

Final arrangements can include organ donation, as well as funeral plans, including how they are to be paid for. Pay-on-death bank accounts are often the best way to handle funeral expenses.

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9. Make Copies and Store Your Documents.

Once you have gathered all your estate planning documents, make copies and store the original and copies in a safe place, such as a fireproof safe in your home or a safe deposit box.

Make sure at least one other person will be able to access these documents after your death.

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10. Talk With Your Loved Ones.

Important Decision & Planning When You’re Caregiver

As a caregiver our burden and worry of passing away is very real for many who are concerned about how loved ones will be cared for when we are gone. Especially here in Florida where resources for disabled children and young adults are severely lacking in so many critical areas like housing, adult enrichment/ job training programs, transportation, respite services, and surrogate caregivers. And because of this lack of service it’s extremely important that caregivers consider including the following items within their estate and end of life planning. Your loved one is depending on it.

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• Consider setting up a trust for yourself , along with a special needs trust for the disabled person you want to leave estate funds to without affecting their social security benefits (threshold of losing benefits if their assets exceed more than $2000).

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• You should also make sure to select a healthcare surrogate for yourself and for your disabled loved one. It can be the same person that you trust to distribute your estate or a different individual that you would trust to make life decisions for you or your loved one

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• You must select a contingent guardian to care for special needs child or adult. This person can be a family member or you can select a guardianship organization.

Life Planning Checklist for a Child with Special Needs

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Imagine for a few moments that you are no longer able to care for your child due to your own illness or death.

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Will your child be able to maintain the same quality of life that he or she now enjoys?

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If you cannot answer “yes” to all the questions that will be asked, then you may have some serious deficiencies in your financial and estate plan as it applies to your child with special needs.

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We urge you to create a financial plan for your child’s future and receive professional legal guidance.

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Key questions that a Caregiver should be addressed in order to make important life planning decisions

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___Yes ___ No 1. Do you have a written plan (“Letter of Intent”) to let others know what you want in the future for your child?

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___Yes ___No 2. Have you asked someone to serve as a guardian/advocate for your child when you are unable to?

___Yes ___No 3. Do you understand all the government benefit programs that are available to your child for health care & supervision?

___Yes ___No 4. Do you have current wills that exclude your multiply disabled child by name? (IF NOT, then any funds received may have

to be “spent down” in order to qualify for various government benefits).

___Yes___No 5. Do you have a “Special Needs Trust” to receive and manage all current and future resources? (Only this kind of trust with

very specific provisions will protect and preserve your child’s assets).

___Yes___No 6. If you have a “Special Needs Trust,” is it a “living” trust?

___Yes___No 7. Have you earmarked a specific fund or life insurance to ensure the quality of life you want for your child?

___Yes___No 8. Have you met with friends, relatives, and care providers to let them know about your plans? (This is necessary to prevent

a relative from inadvertently giving money directly to your child).

___Yes___No 9. If you have a “Special Needs Trust,” have you structured your plans so that NO retirement funds are payable to your

trust?

___Yes ___ No 10. If you have done some planning, have you worked with an individual or organization that specializes in financial

planning for children with special needs?

___Yes ___No 11. Have you completed a basic financial and trust fund analysis to determine adequate funding requirements for a “Special

Needs Trust”?

___Yes___No 12. Do you sincerely believe that you have explored all of your options, and therefore have done everything possible to

ensure quality of life for your special needs child?

LETTER OF INTENT

The letter of intent (LOI), while not a legal document, is key to your special needs planning. There’s a tremendous amount of information about a child that only parents/caregivers really know and understand, and the LOI is intended to share as much of that detail as possible. It’s a blueprint for guardians, trustees and service providers, summarizing information regarding family history, your child’s needs, habits and preferences, and your hopes for the future. It’s meant to ease the disruption that will inevitably occur when you are no longer primary caregiver. Review the LOI annually and tell future caregivers how to locate it. It should contain, at a minimum:

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• Overview –A summary of the child’s life to date and your aspirations for the future
• Family history– Information and “favorite memories” relating to parents, grandparents, siblings and friends, as well as the child
• Medical care– Detailed description of disabilities, with medical history, medications and current healthcare providers
• Benefits– List of programs such as Medicaid and Supplemental Security Income (SSI), in which the child is enrolled, agency contacts, case numbers, documentation requirements
• Daily routines – Include activities he loves or hates, and chores he typically performs
• Diet – Likes and dislikes, allergies, interactions with medication
• Behavior management –Programs in place, level of success, unsuccessful past efforts
• Residential – Current living arrangements and changes which may be necessary in your absence
• Education– Programs to date and preferences for the future
• Social life – Activities he enjoys, including vacations
• Career– Types of work he enjoys/might enjoy and supports required
• Religion-Role this plays in child’s life
• End-of-life–List preferences and arrangements that have been made.
• It’s also a good idea to create a two-page, bulleted version for quick reference, with details such as key phone numbers, “meltdown techniques,” and buzzwords or colors that can trigger a negative reaction.

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What Is the Difference Between Transition Planning &

Personal Futures Planning?

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There are several types of Personal Futures Planning, and you may hear them labeled as Maps, Person-Centered Planning, or similar. The major differences between the school’s transition planning and Personal Futures Planning are the latter’s dream/goal-driven focus, voluntary involvement of team members, and informal environment. There are no laws requiring a Personal Futures Planning. Instead, a group of caring and committed individuals gather in a relaxed environment, such as the teenager’s home, approximately every eight weeks to help the individual remove barriers in order to reach his ultimate goals.

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The focus of Personal Futures Planning is free exploration of future options and barriers to obtain the dream for the person and their family. When possible, the person should be the central figure in exploring his or her own dreams and nightmares for the future, and the ultimate decision-maker. When that is not possible, the family will be the primary driver in exploring for the future. Certainly, public agencies are an important component, but these meetings are a time to discover and develop other resources such as siblings, family friends, relatives, churches, community centers, libraries, and so forth. Each family and community is unique in its potential, and these often-hidden resources are the key to the successful implementation of a plan. The school IEP and transition plan can be a point to start and can be a place where barriers to a plan may be worked on.

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The planning will certainly address multiple goals, but the two primary goals will be:

1) day time activities, including employment or an appropriate day program

2) a future living situation, whether immediately after graduation or in the distant future.

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Planning for the Financial Future of a Child with a Disability

Steps 1 Through 12

by Steve Morris

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Step 1: Decide What the Future Looks Like for Your Child

You must first decide what you want in the future for your special needs child after your death or when you become unable to continue caring for your child due to your own disability. You and your child should focus on such questions as where he/she will live; whether some kind of employment is expected, future education plans, and then other specific kinds of information such as your child’s social life and religious preferences should also be addressed. Finally, any special medical care issues should be thoroughly discussed at this stage in the process.

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Step 2: Write a Letter of Intent

Write a “Letter of Intent” for your child. This letter is a document that parents complete that will put into their own words their hopes, desires, and goals for their child. The primary focus here is to put into a single document sufficient information to provide the needed guidance to your guardian, advocate, and trustee of your child’s special needs trust (discussed later). The letter will be based upon the decisions made during the family’s discussion of the issues noted in step one. For a more complete background of the letter of intent, go to the following link: www.bridges4kids.org/letter-of-intent-form.pdf, which discusses in great depth the development of the letter.

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Step 3: Choose an Advocate and Guardian for Your Child

Choose an advocate and possibly a guardian for your special needs child. This is the person (or persons) who will be responsible for carrying out your wishes as expressed in your letter of intent. This person can be a family member such as another adult child, a relative, friend, or any other trusted party including a charitable group, commercial organization, or public guardian. The basic role of this person is to step into the parent’s shoes as much as possible and then see to it that all elements of your letter of intent are carried out. Whoever is chosen must obviously be someone who you trust and ideally also has a strong current relationship with your child.

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Step 4: Determine the Costs of Your Child’s Life Plan

Determine the realistic costs for the development of your child’s comprehensive Life Plan. In developing a Life Plan for a special needs child, the parents will usually incur some upfront costs such as financial planning and legal fees, which can range from several hundred dollars up to many thousands of dollars, depending upon both the complexity of the parent’s financial planning as well as the expertise of the professionals utilized. For example, there are numerous organizations around the country that specialize in special needs planning and accordingly offer a package price for the delivery of all services, including legal fees in many cases.

On the other hand, families may end up working with several different unconnected professionals who may not specialize in this area, and therefore, their fees for services could be much higher due to the added research time they might incur as well as the inherent inefficiencies of different professionals doing their work independently of each other. To obtain assistance with some or all parts of Life Plan development, it’s usually wise to find someone or an organization that specializes in the area since this is one area of your planning where you can’t afford to make a mistake.

Parents should also check with their local and state organizations to see if a “Master” or “Community” special needs trust has been established (under federal law) at either the state level or by a local charitable not-for-profit organization that focuses on the disability community. If available, this can provide a much less expensive option for many parents with more limited resources. Planning is still required but using this approach will allow you to avoid the cost of setting up your own special needs trust.

Step 5: Determine the Level of Funding Required for Future Needs

Determine the level of funding that will be required to meet the future needs for your child. To determine your child’s needs, you should first examine all aspects of your child’s future care needs with a particular focus on the cost of providing all the goods and services he or she will require. This is always a difficult task since there are so many unknowns in the future. However, in spite of these unknowns, it is always better for the parents to go through this analytical process rather than some unknown but well-meaning government bureaucrat.

A good place to start is to develop a budget for your child based upon the assumption that you are now deceased (see “Supplementary Expense Worksheet“) and then account for the information determined in steps one through three. This allows you put a dollar amount on all aspects of your child’s care so that you end up with a determination of how much additional funding you will need to provide in order to assure that your child has a good quality of life.

Next, you will need to examine your own personal financial planning situation. At a minimum, this should entail the development of a personal financial statement so that you can see how much of your estate would be available for funding your child’s future needs deficit. Ideally, some kind of trust fund analysis should be completed to determine your funding target.

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Step 6: Prepare Your Last Will and Testaments

Prepare carefully worded Last Wills and Testaments for both parents and other appropriate legal documents such as powers of attorney (POA) for both parents as well as consideration of the need for a guardian or a POA for your child. The key element here is that you should have “pour over” wills that leave nothing to your special needs child, but instead, leave his or her share to the previously mentioned legal device called a special needs trust which is addressed in the next step.

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Step 7: Establish a Special Needs Trust

Establish a “Quality of Life” special needs trust for your child which will hold and manage all funds left to your child for the rest of his or her life. Ideally, the trust should be a “living” trust so that it can be used while the parents are alive, and it should also be fully “discretionary” so that it can’t be attacked as a “support trust” by the government authorities.

Another critical part of this step is the selection of “successor trustees” who will serve after you are gone. These are the people or professionals who will manage the trust fund for your child’s benefit. See the “Special Needs Trust Worksheet” for guidance on selecting successor trustees. If individuals are chosen as successor trustees instead of a professional trustee (which is commonly done), they need to be made aware of the unique fund management requirements of special needs trusts due to the income tax treatment of such trusts. So when individuals are chosen, it is often advisable to have an investment professional who is experienced in special needs trust fund management available to assist with the key investment decision making.

Once established, the special needs trust’s overarching purpose is to assure a “Quality Life” for your special needs child. It accomplishes this by protecting all current and future government benefit programs as well as providing for those areas of need not provided by the government programs. For example, if your child needs new furniture, the trust can pay for it; also vacations and guardianship costs can be paid for. If your child needs a medical procedure that Medicaid/Medicare doesn’t cover, the trust can pay for it. When properly drafted, these trusts have a lot of flexibility in paying for all those extra things that will enhance your child’s quality of life.

Step 8: Find Funding Sources

Once your child’s funding needs are determined (Step 5) and the special needs trust has been established (Step 7), it is now time to decide how you are going to actually fund your child’s trust. At this point, the main task is to select a combination of current and future resources that will be earmarked for your child’s trust. In Step 5, you determined how much the funding deficit was based upon your child’s needs as well as your resources. Now, you need to select which resources to earmark for your child’s trust.

The first thing parents need to know is that some resources are much better than others for funding the trust. For example, a major asset owned by many parents is a retirement plan (IRA, 401K, etc.), yet retirement funds are probably the single worst asset that parents can use for funding the special needs trust. The downside is due to the income tax burden of these funds when payable to a special needs trust. But an equally big problem is that many parents will use up these funds for their own retirement, which is their primary purpose. Most other kinds of investments such as savings, mutual funds, stocks, and bonds should work just fine. But if there are still deficiencies, then probably the best way to fill the gap is with life insurance, and usually, the best type of policy is one that insures both parents and is payable only after both are deceased (these are called “joint survivor” or “second-to-die” policies).

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Step 9: Organize Life Plan Documents

Organize all Life Plan papers and legal documents into some kind of folder or notebook so that when it is time to update things, everything will be easy to find. You will want to have all relevant documents readily available such as your letter of intent, special needs trust, wills, POAs, guardianship papers, government documents/correspondence such as SSI and Medicaid card, information about funds earmarked for your special needs trust, and so on. This also makes it much easier for all the other parties who will be a part of your child’s Life Plan to get acquainted with your plans and what will be expected of them.

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Step 10: Meet with All Parties Involved

Hold a meeting with all parties who will be involved with your child’s life so that they understand exactly what their respective roles will be and where you keep your Life Plan binder or notebook. Provide copies of relevant documents to each person who will be involved in your child’s life. For example, the first successor trustee should be provided a copy of the trust to acquaint themselves with the provisions of the trust. All parties should be given a copy of your letter of intent so that they can become familiar with your child’s entire Life Plan. Also, it’s usually a good idea to communicate in some fashion with all other immediate and extended family members (particularly grandparents) about the creation of the special needs trust in case they have a desire to leave something to your child. Please consult the following sample letter to friends and relatives about a special needs trust for an idea of what you need to say.

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Step 11: Review Your Child’s Life Plan On a Regular Basis

Review your child’s Life Plan on a regular basis but at least annually. Many things can change in our child’s life and in the state and federal laws that govern benefits that he or she receives. It is often suggested that a good time to do this each year is on your child’s birthday or during the holiday season at year-end when thoughts naturally turn to family matters. If you decide to work with some professional advisers, you should also check with them to see if any financial or legal changes have occurred that would affect your Life Plan.

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Step 12: Relax

RELAX! You are done for now, and all you have to do in the future is to review your plans as noted in Step 11.

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PLANNING SURVEY

1. Have you ever been responsible for making funeral arrangement for someone else?
1. If Yes, was it, __ within the last 12 months, __12-24 months ago __ over 2 years ago?

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• Are you aware that you can lock in your costs at today’s price by arranging for a funeral in advance, no matter how many years it is between commitment and use? __ Yes __ No

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• Have you already arranged a funeral in advance? __ Yes __No
• If no, would you like more information? __ Yes __ No

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• In the event of your death, who is responsible for making your final arrangements?
• __ Spouse __ Children __Other Family member __ Friend

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• Are your loved ones aware of your preference in funeral arrangement? __ Yes __ No

If Yes, have you provided detailed written instructions to them about your arrangements __ Yes __No

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6. Have you already purchased a cemetery plot?
2. If yes, would you like more information? __ Yes __ No

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Homework –

I hope that you found this information helpful. All that I ask of each of you is to do the homework. Have the difficult conversation about your end of life plan. Feel free to reached out if you need help or have any questions.

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Jackie Yearby

Cell- 631-807-2974

QUESTIONS

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