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The Heritage Law Center, LLC Blog

5 Common Mistakes in Special Needs Estate Planning

POSTED ON: March 17, 2020

The right estate planning for families with members who have special needs is extremely important. When the person caring for the special needs individual passes away, the proper estate planning is essential to ensure that your child will always be cared for the way you want them to be.

These are the most common mistakes people make when doing special needs estate planning:

  1. Not planning at all
    Without any plan, when the caregiver passes away, the special needs person could inherit a good amount of money via the Massachusetts’ intestate law. That money could jeopardize their eligibility for public support like MassHealth, Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and other government benefits.
  2. Taking the do-it-yourself route for estate planning
    DIY estate plans don’t address complicated issues like those involved in special needs estate planning.
  3. Using a regular trust instead of a special needs trust
    If a regular trust is used, the individual could lose public support benefits because they have access to that inheritance. A special needs trust can preserve both the public benefits and any additional inherited or awarded assets.
  4. Not updating beneficiary designations
    Property like retirement accounts, life insurance, and certain financial accounts pass directly to beneficiaries. In order to protect public benefits, the beneficiary designations should be the name of the special needs trust.
  5. Not funding the special needs trust
    Some parents don’t fund the trust while they’re living, and plan to fund the trust after the parent’s death. But then they don’t include the specific and clear language in their will that is needed to transfer an inheritance to the special needs trust.

For more information and guidance on estate planning related to caring for a child with special needs, call us at (617) 299-6976 or send an email to mkarr@maheritagelawcenter.com.