The Importance of Dotting All Your I’s and Crossing All Your T’s When Your Legacy Includes a Beneficiary With Special Needs

by Legacy Plan Aug 5, 2016

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Summary: When you have a loved one with special needs whom you desire to include in your estate plan, you have many essential steps you should take in creating and maintaining your plan. Establishing and funding a “Special Needs Trusts” or “Supplemental Needs Trusts” may be an important part of achieving this element of your legacy. But protecting your loved one with special needs goes beyond that. Proper planning also means looking at, and periodically reviewing, your entire estate, including non-probate assets, in order to ensure that there are no components in your estate (and estate plan) that could cause problems for your loved one and frustrate the goals you were trying to accomplish.

One of the groups of people who have one of greatest needs for engaging in careful and comprehensive estate planning is people who have one or more beneficiaries who have special needs. For these people, proper planning is vital because, in many cases, the beneficiaries with special needs whom they desire to include in their legacy receive essential services through governmental programs that have needs-based eligibility requirements. One wrong step could mean an event that triggers your loved one’s disqualification and a loss of those services. Even if it is only temporary, such a loss could be very harmful.

If you have a loved one with special needs whom you desire to include in your estate plan, you may already have heard about “Special Needs Trusts” or “Supplemental Needs Trusts” (SNTs.) This variety of trust planning can be very helpful because it allows you to provide a distribution for the benefit of your loved one with special needs without doing it in a way that potentially jeopardizes their continued eligibility for their government program-based benefits and services. This type of trust planning allows you to take the money to you would have left to this beneficiary and place in it an irrevocable trust for the benefit of that person. A person (not the beneficiary) whom you name then serves as the trustee of the trust, manages all of its funds and makes all decisions.

Most people’s estates go beyond just what is subject to their probate estate or living trust, however. This is why proper planning for your special needs family goes beyond just establishing a special needs trust. For example, what about your life insurance, annuities, IRAs, other investment products…. or, for that matter, any account that has a pay-on-death or transfer-on-death designation attached to it?

Have you made sure that all of these accounts’ death beneficiary designations are constructed properly? For example, let’s say you have two children: a son with special needs and a daughter who doesn’t have special needs. You have a SNT for your son. You may have set it up and funded it properly, but if your IRA’s death beneficiary designation says, “To Son and Daughter equally as co-beneficiaries,” your son could still have an eligibility requirement when you die. This is another excellent reason why estate plan reviews — reviews that are genuinely comprehensive and look at all of your estate — can potentially do so much good. Maybe you’ve set up a new financial account, or maybe you just moved from one account provider to another. Are you certain that all of your death beneficiary designations are constructed properly? A thorough review is as vital a part of planning for your special needs family as is creating a SNT.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at

This article published by:
Legacy Assurance Plan
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone) (email)

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