Hal Wright wrote an excellent article for the Denver Post newspaper's Sunday, August 24, 2014 edition entitled "Special-needs children need lifetime plan for expenses." In this excellent article Mr. Wright discusses the need for all aspects of planning...legal, financial, life goals, etc.
The legal consideration mentioned is a special needs trust. The basic concepts for the special needs trust are:
1. In the United States government programs for the disabled just provide for very basic life preservation needs. Put more bluntly, these programs may support a disabled person at a poverty level.
2. Many families want to supplement that poverty level existence by leaving money to be used for extras that the government does not provide. Such extras may be to: provide travel expenses to visit family members, and cosmetic dentistry and surgery.
3. The trust deals with the above by stating that the trust monies cannot be used for anything that would jeopardize the government benefits providing for the bare necessities while providing for the enhancements that the extra money may provide.
The big issue that Mr. Wright omitted is a discussion of the fact that the disabled person, especially if a child, may live longer than a parent who may wish to act as a trustee. In other words, it is important to have a trustee who will be around for a very long time. To resolve this concern there has been at least one nonprofit corporation established to administer these trusts long term. I will obtain information regarding this organization and post it in next week's blog.