Brenda Vingiello, Sand Hill’s Chief Investment Officer, joined Squawk Box to discuss her thoughts on the latest market trends and market outlook for 2025. This
Planning for Children with Special Needs
Published Date : August 2, 2017
Every parent can probably remember being asked when they were expecting, “Are you hoping for a boy or a girl?” The quick answer, of course, is that you are hoping for a child that is healthy. Raising and caring for a child with special needs can be extremely rewarding, but it can also present greater parenting challenges on every front. The need for medical care may be significant and the need for social and emotional support even more intense; and these needs can extend well beyond age eighteen. For parents of these children, the greatest concern may not be how to care for them today, but “Who will care for our child when we’re gone?”
To help address these issues, parents of children with special needs have a unique set of tasks that touch on a variety of subjects ranging from health care and financial planning to guardianship and maximizing government benefits. Given the complexity and importance of these issues, it is critical that an attorney experienced with special needs planning is engaged. He or she will be best qualified to lead you through the planning process for your family as well as your special needs child. The decision about how to allocate resources among multiple children when only one has special needs can be especially challenging for parents. Determining “What is fair?” is a complex task that demands the help of an attorney and experienced financial planner.
One of the most important issues to consider is whether to establish a special needs trust. This type of trust holds assets earmarked for the disabled individual with the primary goal of improving his or her quality of life while not jeopardizing the ability to qualify for public assistance benefits like Medicaid or Supplemental Security Income (SSI). Without a carefully drafted trust, a disabled person who owns more than $2,000 of assets can be disqualified from receiving government benefits. Even with the use of a trust, it is important to become very familiar with the rules on how they should be drafted, funded and administered. For example, the typical “Crummey” provision included in trusts, which allows gifts made in a specific manner to qualify for the annual exclusion from gift and estate tax, would be inappropriate in this application. Assets of a disabled individual — even those owned in trust — must, at their death, reimburse the government for Medicaid payments made during their life. Trusts funded with assets owned by others and never owned by the disabled individual, known as “third-party” trusts, have no such requirement.
The rules for distributions from special needs trusts are similarly complex. Third-party trusts can pay for virtually anything to enhance the life of the beneficiary. First-party trusts, where the assets are owned by the disabled individual, are extremely restrictive. For example, no distributions can be made for food or housing without a reduction or total loss of Medicaid and SSI benefits. Consultation with an attorney can help to navigate the landscape so that no costly mistakes are made.
“Making the decision to have a child – it is momentous. It is to decide forever to have your heart go walking around outside your body.”¹ This quote is especially poignant for parents of children with special needs who require unique planning considerations. Enlisting the proper support team as partners in this process may help ensure that the child lives a full life and maximizes their potential even when Mom and Dad are no longer around.
Resource: specialneedsanswers.com
¹ Elizabeth Stone
Articles and Commentary
Information provided in written articles are for informational purposes only and should not be considered investment advice. There is a risk of loss from investments in securities, including the risk of loss of principal. The information contained herein reflects Sand Hill Global Advisors' (“SHGA”) views as of the date of publication. Such views are subject to change at any time without notice due to changes in market or economic conditions and may not necessarily come to pass. SHGA does not provide tax or legal advice. To the extent that any material herein concerns tax or legal matters, such information is not intended to be solely relied upon nor used for the purpose of making tax and/or legal decisions without first seeking independent advice from a tax and/or legal professional. SHGA has obtained the information provided herein from various third party sources believed to be reliable but such information is not guaranteed. Certain links in this site connect to other websites maintained by third parties over whom SHGA has no control. SHGA makes no representations as to the accuracy or any other aspect of information contained in other Web Sites. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. SHGA is not responsible for the consequences of any decisions or actions taken as a result of information provided in this presentation and does not warrant or guarantee the accuracy or completeness of this information. No part of this material may be (i) copied, photocopied, or duplicated in any form, by any means, or (ii) redistributed without the prior written consent of SHGA.
Video Presentations
All video presentations discuss certain investment products and/or securities and are being provided for informational purposes only, and should not be considered, and is not, investment, financial planning, tax or legal advice; nor is it a recommendation to buy or sell any securities. Investing in securities involves varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular client’s financial situation or risk tolerance. Past performance is not a guarantee of future returns. Individual performance results will vary. The opinions expressed in the video reflect Sand Hill Global Advisor’s (“SHGA”) or Brenda Vingiello’s (as applicable) views as of the date of the video. Such views are subject to change at any point without notice. Any comments, opinions, or recommendations made by any host or other guest not affiliated with SHGA in this video do not necessarily reflect the views of SHGA, and non-SHGA persons appearing in this video do not fall under the supervisory purview of SHGA. You should not treat any opinion expressed by SHGA or Ms. Vingiello as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of general opinion. Nothing presented herein is or is intended to constitute investment advice, and no investment decision should be made based solely on any information provided on this video. There is a risk of loss from an investment in securities, including the risk of loss of principal. Neither SHGA nor Ms. Vingiello guarantees any specific outcome or profit. Any forward-looking statements or forecasts contained in the video are based on assumptions and actual results may vary from any such statements or forecasts. SHGA or one of its employees may have a position in the securities discussed and may purchase or sell such securities from time to time. Some of the information in this video has been obtained from third party sources. While SHGA believes such third-party information is reliable, SHGA does not guarantee its accuracy, timeliness or completeness. SHGA encourages you to consult with a professional financial advisor prior to making any investment decision.
Other Posts By This Author
- – Understanding the Terms: All About That Basis
- – Home Sweet RV
- – The Basics of Long-Term Care Insurance
- – Roth IRA Conversion: 2023 May Be Your Year
Related Posts
- – The Flexibility of the California Uniform Directed Trust Act
- – An Optimal Approach to Beneficiary Designations and Your Children
- – Caring for Our Feline and Canine Companions
- – Choosing Your Legacy: Deciphering Per Stirpes Vs. Per Capita in Estate Planning
- – The Advantages of Exit Planning: Secure Your Legacy and Maximize Your Wealth
Recent Posts
