When planning your estate involves considering a combination of healthy and disabled children, it can be tempting to avoid the complication of establishing a special needs trust for your disabled child. You may think it will be easier to simply leave all your assets to your healthy children, trusting them to use the funds as needed for the care of their sibling with special needs.
On the surface, this seems logical. But in reality, this type of situation can create a multitude of problems. Let’s take a look at what might happen if you have two children — one healthy, one disabled — and you leave all your assets to your healthy child.
Complications Due to Divorce
If you entrust all of your assets with one child, what happens if he gets a divorce? It’s highly possible that his spouse will receive half of those assets in the divorce settlement. Who’s to say that the spouse will use any of that money for your special needs child? You have no control over what they do with that money, and neither does your healthy child.
Complications Due to Death or Incapacitation
What will happen if your healthy child — who holds all of your assets — dies or becomes incapacitated while your special needs child is still alive? His family will be focused inwardly and may not give your special needs child the care he requires. There are no rules for how the money can be used if it’s not held in a trust, so the family can use it however they like.
Complications Due to Lawsuits or Credit Problems
Suppose the child with the money loses a lawsuit or runs into serious creditor problems. Because your assets are not contained within a special needs trust, the court will require him to forfeit those funds to the winner of the lawsuit or the creditor. Your child will have no way to prevent this from happening, and your special needs child may suffer as a result.
Complications Due to Moral Dilemmas
If there is no special needs trust guiding the distribution of your funds, your healthy child may feel the weight of making those decisions himself. He may have a need in his own family that would be covered by those assets, but he may be unsure whether or not he can spend it on his family — and even if he can, how much is he allowed to spend? These dilemmas could be erased simply by holding the assets in a special needs trust governed by a trustee.
Set Up a Special Needs Trust with Alabama Family Trust Today!
If you’re unsure whether a special needs trust is right for you, contact us and let us answer all your questions. We are here for you every step of the process!