Estate planning for special needs children – get it right with good advice
We know there are many estate planning situations that are enormously complex. Corporate ownership, assets in multiple jurisdictions, multiple family beneficiaries, family dysfunction issues – all of these can complicate an estate plan significantly.
But there are few estate planning issues as urgent as planning for the future care of someone with a physical, mental or emotional disability, especially when it’s a child with a long life ahead but who lacks the capacity to look after their own needs.
I use the word “urgent” because the great fear of loving parents planning ahead for the care of their special needs child is “getting it wrong” and leaving an estate that doesn’t adequately address their child’s needs. The good news is that a combination of good advice and careful planning will go a long way to ensuring you “get it right.” Here are a few high-level suggestions that can help you get there:
- Start as early as possible: When you have a young child with a significant disability, time, energy and the ability to think beyond the needs of the day are often limited. So it’s tough to think about the future – especially when it concerns death. But it’s worth your thinking time. While the risk of you and a spouse passing away at an early age is low, the risk isn’t zero. All new parents should be addressing issues such as life insurance and their will when they have a child. But it’s even more critical if your child is unlikely to be able to care for themselves as an adult. And by starting your planning at an early stage, you may be able to maximize the benefits of certain planning tools, like the Registered Disability Savings Plan (RDSP).
- Get advice – and understand the tools available to you: There is no “one size fits all” when it comes to estate planning for someone with special needs. There are government benefits that an individual may be eligible for, like the Ontario Disability Support Program, savings arrangements available, like the RDSP, and trust arrangements to consider, like a “Henson Trust” https://hullandhull.com/2015/12/henson-trust-advantages-and-disadvantages/ that can provide ongoing income to a beneficiary without jeopardizing eligibility for government benefits. A lawyer or financial professional with expertise in this area can be an invaluable resource.
- Put a plan in place: Act on the good advice you get and put your plan in place. That means moving the drafting and execution of your will up your priority list, because it’s a process that few enjoy and often falls into the “I’ll get to it eventually” category. There’s a lot at stake, so do it sooner rather than later.
- Revisit your plan regularly: Your situation may change, your child’s needs may change, and laws may change. Sit down with a professional every few years to review your plan and determine if a change could be beneficial.
This advisory has a good overview of the main planning tools that may be available to you:
Thank you for reading … Have a wonderful day!