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               How any Type of Disability Affects

                         Your Estate Planning

Disabilities, of course, can take many forms and have varying degrees of severity. The nature and severity of your child's disability will affect the nature of the estate plan that you, as parents, develop.

Physical disabilities or health impairments. Many individuals have physical disabilities or health impairments that do not affect their ability to manage financial or other affairs. If your son or daughter has such a condition, how to leave your estate depends on a number of factors. The primary factor will be whether or not your son or daughter receives (or may one day need to depend on) government benefits such as Supplemental Security Insurance (SSI), subsidized housing, personal attendant care, or Medicaid. If your child does receive (or may one day need to depend on) government benefits, then it is most important to create a special estate plan that does not negate his or her eligibility for those benefits. How to do this is discussed in some detail in this NEWS DIGEST.

On the other hand, you may have a son or daughter with a physical disability or health impairment who is not eligible for or who is not receiving government benefits. In this case, you may be able to dispense with elaborate planning devices and merely leave your child money outright, as you would to a non-disabled child. If you believe that the disability may reduce your son or daughter's financial earning capability, you may want to take special care to leave a greater portion of your estate to this child than to your non-disabled children.

There are some exceptions to this simplified approach, of course. One exception is when parents are somewhat fearful of their son or daughter's financial judgment. If you are concerned that your son or daughter with a disability may not responsibly handle an inheritance, then you can utilize a trust, just as you would for a non-disabled heir. Another exception is if your child's disability or health impairment involves the future possibility of deteriorating health and more involved health care needs. While your son or daughter may be capable of earning money and managing an inheritance at present or in the immediate future, in twenty or thirty years time deteriorating health may make it difficult for him or her to maintain employment or pay for health care. Government benefits might then become critical to your child's security. Remember, benefits include much more than money; your child may also be eligible for valuable services such as health care, vocational rehabilitation, supported employment, subsidized housing, and personal attendant care. If, however, he or she acquires too many assets through inheriting all or part of your estate, he or she may be ineligible for these benefits. Therefore, in order to protect your son or daughter's eligibility for government benefits at some point in the future and to provide for his or her long-range needs, you may need to consider establishing a special estate plan.

Cognitive disabilities or mental illness. If your son or daughter's disability affects his or her mental capability, the need to create a special estate plan is more clear cut. Mental illness and cognitive disabilities often impair a person's ability to manage his or her own financial affairs, while simultaneously increasing financial need. As a result, you must take care to ensure that there are assets available after your death to help your son or daughter, while also providing that the assets are protected from his or her inability to manage them.

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C. Francis Baldwin
Updated Wednesday, May 26, 2004