Is An Attorney Needed When Attempting To Attain My Inheritance

At some point, the parents of a son or daughter with a disability will no longer be here to help their child. Most parents’ hope that after they are gone, they can leave behind an estate that can be of assistance to their son or daughter and continue to enhance the quality of his or her life.

However, persons who have a disability often depend on governmental programs for care and assistance. Because a direct inheritance would jeopardize these benefits by increasing the assets of the person, parents of a son or daughter with a disability who wish to assist their child financially after they have died, need to approach the planning of their estate differently than most people.

For someone who receives assistance from governmental sources such as medical assistance, an outright inheritance would mean that this financial assistance would be discontinued until the inheritance was used up. The inheritance would be used to pay for needed services (such as medical care, residential services, or day activities). Only when the inheritance had been depleted would the governmental benefits begin again.

However, by planning their estate carefully, parents can ensure that the inheritance they leave will supplement, not replace, the public assistance funding received by their son or daughter to cover their basic needs. Through careful planning, proceeds from the estate can be used to add to the quality of life for their son or daughter.

LEGAL ASSISTANCE:

Because careful estate planning involves the drafting of a will, parents will need to seek the services of an attorney. When engaging an attorney for this task, parents are advised to:

Be sure that the attorney is familiar with estate planning, especially as it relates to your son or daughter with a disability. If an attorney is not well versed in this type of estate planning a portion of his or her time will need to be spent becoming familiar with these laws. Parents should "ask around." Families who have completed the process, or advocacy and disability organizations may be able to provide names of attorneys with expertise in this field. Talk about the fee arrangement in advance. More time will be involved than in drafting a simple will, so parents should be sure all costs are discussed. In order to ensure that a total plan is developed for your son or daughter with a disability, parents may want to consider both estate planning and guardianship or conservatorship arrangements. ESTATE PLANNING:

When planning an estate, two types of assets should be taken into consideration:

Those assets that would be listed in your will, or probatable assets; Nonprobatable assets such as life insurance or proceeds from an IRA (individual retirement account). In either case, it is important to NOT name the person with a disability as the beneficiary. This can be accomplished in one of three ways:

Omitting the person with a disability from the will. It should be clearly stated that it is your intent that your son or daughter not receive an inheritance from you. The statement of omission is sometimes accompanied by the next action. Having the parents of a son or daughter with a disability make a gift to another person with the understanding that the gift is to be used for the benefit of their child with a disability. Because this must be an informal agreement to avoid jeopardizing benefits, there are no guarantees that the gift will be used as the person intended. Establish a supplemental trust. TRUSTS:

A trust is the preferred way to make a gift or leave a bequest to a child with a disability. Generally, a trust is a separate entitiy created to enable a trustee to manage property for one or more beneficiaries. To create a trust, a grantor transfers assets to a trustee for the benefit of a named beneficiary, with instructions to the trustee how the assets are to be used. A person may either create a trust during their lifetime (living), or provide for a trust in the provisions of a Will (testamentary).

TYPES OF TRUSTS:

In a discretionary trust, the trustee has the power to decide what the beneficiary will receive, if anything, from the trust. The beneficiary does not have a right to compel the trustee to make a distribution from the trust. The discretionary trust gives the trustee the most latitude when making distributions to the beneficiary. Under a discretionary trust, the trustee can provide for basic living needs only. In a support trust, the beneficiary has a right to receive sufficient funds to provide for reasonable care, support and living expenses. A mandatory trust provides a set amount (or the method for computing the amount) which the beneficiary is to receive.

 Another kind of trust is a supplemental support trust. This trust is a mix between the discretionary trust and the support trust. The supplemental support trust is designed to prohibit the trustee from making distributions for primary or basic support. The supplemental support trust places restrictions on the trustee and generally does not allow the trustee to make any distribution to a beneficiary’s basic living needs, and only allows for supplemental needs to be provided. The supplemental support trust is best used when there is assurance that the basic living needs of a beneficiary with a disability are provided by public benefits or other means.