Although Gary and I finalized this before I started blogging, I thought it might be of interest to some if I shared our experience setting up a Special Needs Trust...
Gary and I established the Lindsey Revocable Living Trust, a special needs trust, to take care of Sheridan after we're gone. Ugh... hate to think about that kind of stuff, but it's soooo necessary.
Before I go any further, it's my obligation to tell you what you likely already know: I'm not an attorney, I'm not an estate planner, I'm not a banker, and I have no expertise in any of the professional arenas involved with estate planning. In fact, I do my best to explain what I have to share, but it's only based on my own understanding (an attorney might argue that I don't totally explain something here correctly). What I'm offering is simply our experience and the issues we felt were important for consideration . I just hope that our experience might help others to start thinking about these issues if they haven't already. Ok. Enough with the "Lisa only barely knows what she's talking about" stuff...
Gary and I had *finally* talked about putting together a will when I was pregnant with Sheridan. After Sheridan was born and diagnosed with Ds, we realized that a will was no longer good enough.
I'll admit, one of my biggest fears (that I still hold today) is what happens to Sheridan after we're gone. Having a child with special needs means needing to plan far into the future... often farther into the future than we can even try to imagine. Bottom line: we needed to make sure Sheridan has what he needs to live independently, semi-independently, or whatever his living arrangements will need to be, and that his health, social life, and overall well-being would be taken care of (to the best or our abilities).
We needed to establish a special needs trust - which, in our case, is a revocable living trust that has a special needs provision. In a nutshell, Sheridan is a beneficiary of the trust (which includes all of our assets - like property, life insurance, etc.) and it does not jeopardize his ability to qualify for public services like MediCal (which is California's name for Medicaid - why do we always have to be so darn original?), Social Security, etc. So, the money in the trust (like from our life insurance) can be used to pay for his housing, any medical needs beyond those he is eligible for through MediCal, transportation, etc. Just as important, (this is important, because if any money, our home, our life insurance, etc. were left to Sheridan in his name, it would all count as income/assets for him and he would be disqualified from public services because he would "make/have too much money").
And let me be clear, when I'm talking about estate planning, you might be thinking, "We don't have an 'estate' - we don't have much at all." Well, welcome to the club. We have a negative net worth (not something that's pretty to see in writing from a financial planner, let me tell you). So, technically it looks like - right now, anyway - all we have to give is a big fat zero. But it doesn't matter. One day our life insurance will kick in, one day in the very far-off future we'll (hopefully) pay off our home, or one day our parents (Sheridan's grandparents) might want to leave him some money when they die (more on this specific issue later).
My point: you don't have to actually a lot of money or property to set up a trust.
Okay, so what were the most important things we needed to think about when creating the trust? Here's a Top Ten list of some of the bigger ticket items (in no particular order)...