For families with children, creating a comprehensive Houston estate plan is critically important. The need for such planning is even more important for those with children who have special needs. As with all parents, proper planning is the only way to ensure that children will be properly cared for if their parents pass away prematurely. However, children with special needs may have very specific needs that must be met. If these needs are not addressed in their parents’ estate plan, they are less likely to be cared for should one or both parents pass away. Furthermore, based on the severity of the child’s disability, parents may need to plan for ways to meet such needs long into adulthood.
One of the most common estate planning tools for parents with special needs children are trusts. A trust is an arrangement where property is placed under the ownership and care of a trustee for the benefit of one or more beneficiaries. It is almost always a good idea for parents of a special needs child to provide for the creation of a trust naming that child as a beneficiary. However, the creation of a trust is not the only thing for parents to consider. Here are a few estate-planning considerations for parents interested in creating a trust for their child with special needs.
Choosing the Right Type of Trust
Trusts come in different types. When it comes to providing for a child with special needs, a basic discretionary trust may not be sufficient. This is because it may not the necessary provisions to adequately provide for the child’s needs. Therefore, in many circumstances, it is necessary to create a special needs trust. This is a more detailed trust arrangement that accounts for needs specific to children with special needs For example, if the child is receiving disability-related benefits, a special needs trust is better equipped to provide them with income without reducing the benefit amount.
Likewise, parents of children with special needs must consider whether to create and fund the trust while they are alive or whether the trust should be created through a will. A trust created through a will, also known as a testamentary trust, is created and funded upon the death of a parent. This option may be more economical because it doesn’t require property to be added to the trust while the parent is alive. However, if there are other family members who want to leave property to the child in trust, a testamentary trust is not sufficient because it does not exist until a parent passes away.
Choosing the Right Trustee
Another important consideration is naming a trustee. The trustee has the important role of managing the trust funds for the benefit of the child. Therefore, the trustee must be someone who can be trusted. However, that does not mean that choosing a reliable friend or family member is a good idea. Trust administration can be complicated. If the trustee cannot effectively manage the trust, the child is the one who ultimately suffers. For this reason, many people choose corporate trustees or attorneys to manage their trusts.
For those who do not feel comfortable putting a corporate trustee in sole charge of managing trust funds, there are additional options. One of those options is to name a co-trustee. The co-trustee could be a trusted friend or family member who may not have the time to administer the trust alone, but who can provide oversight to make sure the child’s best interests are being protected. Likewise, a reliable friend or family member could be named as a trust protector. Trust protectors do not handle any of the day-to-day administration of the trust. However, they are available to oversee its administration and ensure that assets are protected for the benefit of the child.
Creating a Houston Estate Plan That Provides for Your Special Needs Child
If you have a child with special needs, you will need an attorney with the proper knowledge and skill to put together a Houston estate plan that meets those needs. The attorneys at McCulloch & Miller, PLLC have the experience to meet all of your estate planning needs. Our attorneys will take the time to understand your estate-planning goals, and use their knowledge to craft a plan that achieves them. Give us a call at 713-333-8900 to schedule a consultation, and start planning your estate today.