Special Needs Trust

Should A Trust be an IRA Beneficiary?

Published on: October 18, 2019 | By McCulloch & Miller, PLLC

An IRA is one of the most popular ways to save for retirement. The possibility, however small, does exist that you will pass before using the entire IRA. How do you decide who to leave your IRA to?

In addition to leaving assets, including IRAs and 401(k)s, to heirs, you can also leave assets to a trust. When you first open an IRA, you are asked to designate a beneficiary. However, over time you may find yourself wanting to change that designation. You may also be doing sophisticated estate planning that involves having a trust as the beneficiary for your IRA.

KTVA.com’s recent article, “How to Name a Trust as Beneficiary of an IRA,” discusses some of the important elements of naming a trust as an IRA beneficiary. Naming a trust as a beneficiary requires careful planning, so work with an experienced estate planning attorney.

Basics of a Special Needs Trust

Published on: July 18, 2019 | By McCulloch & Miller, PLLC

Parents of special needs children need to be especially proactive about planning for the future. Their planning should start with an estate plan, that includes a Special Needs Trust.

It’s one of the hardest things for any parent to think about, but for special needs families, planning for the child’s needs when the parents have passed, is particularly important. Trying to determine how much money the child will need while the parents are living and after they have died is complicated.

A recent Kiplinger’s article asks “How Much Should Go into Your Special Needs Trust?” As the article explains, a special needs trust, when properly established and managed, lets someone with a disability continue getting certain public benefits.

Special Needs Planning and ABLE Accounts

Published on: May 24, 2019 | By McCulloch & Miller, PLLC

How the “Achieving a Better Life Experience” Act, known as ABLE, provides a mechanism to create a tax-advantaged savings tool for individuals with disabilities and their families.

The benefits for income, health care, food and housing for disabled Americans are awarded based on a resource test, so that individuals who seek benefits are typically limited to have no more than $2,000 in savings or assets. This includes eligibility for Supplemental Security Income (SSI), SNAP and Medicaid.

In 2014, Congress passed legislation allowing people with disabilities to establish an account, similar to a special needs trust and with some similarities to a 529 college savings account, to accumulate funds to pay for qualified disability expenses. The legislation was named the Achieving a Better Life Experience Act (ABLE).

Special Needs Planning With Special Needs Trusts

Published on: April 11, 2019 | By McCulloch & Miller, PLLC

It is important to understand the basics of special needs planning, so that you can plan for your child’s future. There are many issues to address, but an experienced Houston estate planning professional will be able to help.

Special needs planning is challenging. It’s important to have a strong team to work with. An estate planning attorney with experience in helping special needs families will be able to guide you through the process. They will also likely have access to other professionals to help.

A recent Forbes article, “Special Needs Kids Require Specialized Estate Planning,” says that if you have a child with special needs, it’s critical that you look at your planning options with your estate planning attorney and discuss your child’s health, capabilities and prognosis. You can then customize a plan that works for your child, with as much flexibility as possible.

How Do Trust Funds Work?

Published on: December 26, 2018 | By McCulloch & Miller, PLLC

Trusts serve a variety of functions in estate planning, and they aren’t just for wealthy people.

Trusts can be simple, or they can be complex, depending on what type of trust is being considered and how they are structured. Trusts should be set up by an estate planning attorney, who is familiar with asset ownership and how trusts impact inheritances and taxes.

U.S. News & World Report’s recent article, “Setting Up a Trust Fund,” explains that a trust fund refers to a fund made up of assets, like stocks, cash, real estate, mutual bonds, collectibles, or even a business, that are distributed after a death. The person setting up a trust fund is called the grantor, and the person, people or organization(s) receiving the assets are known as the beneficiaries. The person the grantor names to ensure that his or her wishes are carried out is the trustee.

Is Your Estate Plan Working for You?

Published on: December 20, 2018 | By McCulloch & Miller, PLLC

Remember that estate planning is not just for the wealthy, and now that the federal exemption is so high, not just for the billionaires either. Estate planning is also much more than a will.

Your estate plan has a lot of work to do for you, both while you are alive and for your family when you have passed. A good article that explains it all comes from Investopedia, “How to Get Your Estate Plan on Track.” There are three key objectives that your estate plan needs to do:

End-of-life health care decisions are documented in a legally binding document;

Special Needs Families Need Strong Financial Planning

Published on: September 10, 2018 | By McCulloch & Miller, PLLC

The cost of raising a child with special needs is easily twice that of an average child, and college costs are higher as well.

Families with special needs children need to plan their child’s future carefully in many regards, and financial concerns are, by necessity, a big part of planning. While the average cost of raising a child from birth to 18 is about $250,000, according to The American College of Financial Services, the cost to raise a child with special needs can easily be twice that amount. One of the challenges is preparing for the special needs child when its time to attend college.

WTNH’s recent article, “Financial planning for families with children with special needs,” advises that working with a team of different professionals can help parents manage both the financial and non-financial aspects of providing care. Here are some of the key roles:

Must-Do Retirement Planning Principles

Published on: June 19, 2017 | By McCulloch & Miller, PLLC

In the best of all possible worlds, your retirement finances include a nest egg that generates a steady flow of income while your principal assets continue to grow.

There are six key investment points that, if you can meet them, will make retirement finances work in your favor, according to Stock Investor’s recent article, “6 Retirement Estate Planning Criteria You Must Address.”

Minimum required yield. This is the first factor when looking for reliable long term income. It’s calculated based on household income requirements and investable assets—typically IRAs, taxable brokerage accounts and other savings that are planned for retirement income. When the required percent of investment (portfolio yield) increases, so does the income risk. When the yield is too high to be practical, traditional thought is to liquidate some of your principal by gradually drawing down your investment portfolio over the retirement years or by using an insurance product, such as a single premium immediate annuity.

Longer Life Spans for Special Needs Children Impact Parents’ Retirement Planning

Published on: July 29, 2016 | By McCulloch & Miller, PLLC

A dramatic increase in the number of adults with developmental disabilities, coupled with their increasing life spans, presents planning challenges for parents.

Special needs families are accustomed to things being more complicated, and retirement planning is no exception. Parents must plan for their own retirement as well as ensure that a plan is in place for the time when the parents are no longer able to care for their special needs child. That includes everything from the basics, like making sure that beneficiary designations are up-to-date, to ensuring that the child’s inheritance does not make the child ineligible for means-tested government benefits.

A recent MarketWatch article, “Parents of special needs children plan for two futures,” says that special needs parents are really planning for two lifetimes. In 2030, there will be approximately 1.2 million adults age 60 and older in the U.S. with developmental disabilities. That’s about twice as many of the 642,000 who fit that profile in 2000, according to 2012 research by the University of Illinois at Chicago. Also, according to the National Down Syndrome Society, today people with Down syndrome have a life expectancy of 60, compared with just 25 in 1983.

Special Needs Trusts Provide Parents with Peace of Mind

Published on: June 22, 2016 | By McCulloch & Miller, PLLC

Houston Families who are faced with the often overwhelming financial, logistical and emotional challenges that come when a family member has special needs use these trusts to protect their child's quality of life.

A young couple who wisely had an estate plan created while their children were very young returned to estate planning when one of their children developed a chronic and debilitating illness at age 3. Their lives changed dramatically, and their estate plan did also.

CNBC's article, "Special-needs trust is key part of some estate plans," says that many couples in this situation will revise their estate plan and create a special needs trust to benefit a disabled child. Special needs trusts, also called supplemental needs trusts, can be a very important estate planning tool for parents of children who are likely to need special care and financial support throughout their lives.