My personal experience often helps me in my work as a lawyer , especially when meeting with parents of special needs children. Many clients have children of varying ages with special needs, and therefore they have more complicated issues to consider when making major life decisions. While every parent wonders what will happen to their children when they are gone, parents of children with special needs must ensure their child is financially provided for, and, depending on the severity of their disability, physically cared for as well.
Generally speaking, there are four things that parents of special needs children should do as part of their estate plan, and as part of the life-long plan of care for their child:
1. Name Legal Guardians
Naming legal guardians ensures that someone the parents trust is legally in place to raise the child in the event that something happens to mom or dad (or both).
Caring for a child with exceptionalities can be challenging. Parents should choose someone who will love and care for the child in their absence. The parents will also want to choose someone who will strive to give their child the opportunities and quality of life he or she deserves.
Any parent’s wishes regarding a child’s legal guardian must be legally documented. Guardians should be aware of their duties if both parents were to pass away. As well, both mom and dad and the guardians must know that the guardianship is in place only as long as the child is under 18. Once the child is a legal adult, other legal mechanisms would need to be in place (see #3).
2. Set Up a Special Needs Trust
In Ontario, special needs trusts are commonly referred to as “Henson Trusts”. This trust is a discretionary trust that ensures a child’s financial needs are met as both a child and an adult, without jeopardizing their eligibility for government assistance.
The government benefits for children and adults with disabilities are limited and usually do not cover all the costs of daily living and extra expenses necessary to improve the child’s quality of life.
If parents left a special needs child an inheritance outright, that would mean that any benefits (including access to services and housing) would be lost.
Instead, parents of special needs children should set up a Henson Trust to “hold” the inheritance for the child, without actually putting the assets in the child’s name. The assets in the trust would be administered by a trustee of the parent’s choosing and according to the rules set out in the estate plan.
Clients with very young children who are very young are often unsure how, if at all, the child’s disability might impact on their ability to live independently as an adult. Since we don’t have a crystal ball to tell us the future, we can craft the trust in such a way that the trustee would have the discretion to collapse it if the child’s needs as an adult did not require the trust. Drafting a trust in a will is complex, and it’s imperative to work with a lawyer well-versed in trusts and the requirements of a special needs child throughout their lifetime.
3. Prepare for a Special Needs Child to Turn 18
Once a child turns 18, they are no longer a child in the eyes of the law. He/she is an adult whose parents can no longer make decisions for them. Parents lose the ability to manage their child’s affairs (medically and financially) when the child turns 18.
Parents need a court order granting them the power to make decisions for their child, both medically and financially. In some cases, the alternative is for the child to execute a Power of Attorney for Property and a Power of Attorney for Personal Care.
Depending on how I came into the picture, the child may need their own lawyer in such cases. There also needs to be a determination of whether or not the child has capacity to execute a Power of Attorney. As a lawyer attempting to determine if my client is able to execute these documents, I have had several visits to learn how to communicate effectively with my client, and have obtained medical opinions to confirm my client is able to instruct me.
And, in circumstances that are difficult for any parent, the parents of the special needs child may need to let him or her go and make their own life decisions. Having special needs doesn’t always equal lack of capacity to manage one’s affairs.
4- Build the Right Support Team
Though many individuals with special needs can live a full life as an adult with limited assistance, this is not the case for all. Many children with more significant special needs will never be able to live fully independently.
For these children, the parents may be lifelong caregivers for their child. However, no parent is invincible. At some point, the parents may be unable to continue to care for their child due to disability, illness or even death.
In these circumstances, it is important the right people are in place to support and care for the child. The members of the team could include the chosen guardians, a trusted medical professional, an estate planning lawyer, a financial advisor and dedicated family and friends. Parents of special needs children need to make sure to keep these team members informed about their wishes and their role in the event they are called upon to help.
If you want to speak with Michele about planning for your special needs child, call her office at 613-933-7720 and mention this article to receive a free Peace of Mind Planning Session (a $500 value).