When parents of children with special needs, in Cincinnati, start planning for their own retirements they also have to plan for how their children will be taken care of after they pass away. Most understand intuitively that they will need to save more money than their peers because they need to ensure sufficient assets are left to take care of their children.
What many do not know is that they need to be careful about how those assets are going to be left for their child with special needs. This topic was the subject of a recent Market Watch article entitled “Parents of special needs children plan for two futures.”
There are two major legal vehicles parents will want to know about and consider taking advantage of:
- Special Needs Trusts – People with disabilities should not inherit assets outright as it could jeopardize their eligibility for government benefits. Instead a special needs trust should be created to hold assets for the benefit of the person with disabilities. These trusts must be created in a specific way, so the assistance of an estate planning attorney is necessary.
- ABLE Accounts – These accounts are not yet available, with the exception of in Ohio, but they will be very soon. These accounts will allow some people with disabilities to have assets in their own name and under their own control, with some restrictions. Parents should be able to set up these accounts for their children and take advantage of the annual gift tax exemption to fund the accounts. Different states will have different ABLE account systems, so parents should shop around and consult experts.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference: Market Watch (July 7, 2016) “Parents of special needs children plan for two futures.”