Excerpted from Special Needs Trusts, by Steven Elias and Kevin Urbatsch (Nolo).
If you are creating a special needs trust for a loved one, you may be concerned about how much property to leave to the trust at your death. (Learn more about How to Leave Property to a Special Needs Trust.)
If your loved one is the only person you want to provide for after your death, then you'll probably want to put your entire estate into your special needs trust and hope it lasts as long as your loved one needs help.
Many people, however, want to leave money not just to a loved one with a disability, but also to other family members or charities. Or you may have more money than you think your loved one will need. In those situations, you'll need to decide how much to leave to the special needs trust and how much to others.
The answer depends on:
- Your family. Do you want to divvy your property up evenly or leave a larger share to the special needs trust, on the theory that your other loved ones can take care of themselves? There are no easy answers, but talking with family members may help you reach a conclusion you feel good about.
- Your life insurance. Many parents of children with disabilities obtain life insurance. This approach lets you leave a sizable sum to the special needs trust under the life insurance policy and still provide for your other family members out of your other property. Learn more about Life Insurance on Nolo.com.
- Your loved one's life expectancy. Grim as it is, you'll have to take your loved one's life expectancy into account when deciding how much property to leave to the special needs trust. To state the obvious, if your loved one's life expectancy is short, then the trust will need less money than if it were long.
- Your loved one's needs. Although it involves some guesswork, you need to think about what you want the trust funds to supply for your loved one, and how much money that will take.
So, how should you juggle all of these factors so that you come out with the right funding for your special needs trust? The short answer is, you shouldn't—unless you are a professional in the area of financial management. It's almost impossible to come up with meaningful numbers without the right calculators, and expertise, at your fingertips. Get help from a professional.
Here are three companies that have created departments specially designed to assist in financial planning for persons with disabilities:
- MassMutual Financial Group has a program called SpecialCare, dedicated to special needs financial planning. In order to be a part of the program, MassMutual agents are required to take a week-long course on special needs planning. Call 800-272-2216 or visit the company's website, www.massmutual.com.
- Merrill Lynch & Co. has set up a program that focuses on financial planning for special needs families and has a training program for its brokers. Call 877-456-7526 or visit the company's website, www.wealthmanagement.ml.com.
- MetLife Inc. has created a special needs unit to help families design financial plans and to refer people to groups that can help direct families to government benefits and services. Call 877-MetDESK (638-3375) or visit the company's website, www.metlife.com.
You can also get help from certified financial planners.
To learn more about special needs trusts, go to the Special Needs Trusts section of Nolo.com.
Special Needs Trusts, by Steven Elias and Kevin Urbatsch (Nolo) provides all of the information and forms you need to create your own special needs trust, with or without the help of a lawyer.