Wills and Trusts
WillsIf you don’t have a will, this is the time to have one prepared. If you already have one, consider adding your newly adopted child to your will or to any trusts you have. Think carefully about who will take care of your adopted child should something happen to you. Financial planners generally recommend that parents not name their children as direct beneficiaries to their insurance policies, retirement plans, individual retirement accounts, investments, and so on. That’s because minors are restricted by state laws in their access to funds. It is important not to name a child with a disability as an outright heir or beneficiary, so as not to jeopardize that child’s government benefits. Special Needs Trust for Children with Disabilities If you adopt a child with a physical or emotional disability who might never be self-sufficient, you can arrange for a special needs trust. Also called a “supplemental care trust,” the special needs trust receives and manages money for a child with a disability. A trust can be useful in allowing family financial support for the child without affecting the child’s eligibility for assistance from the federal government. The money in the trust can be used for items not paid for by government assistance such as medical expenses, dental work, home repair, or education. This is a highly technical area and an experienced lawyer and financial planner should be consulted. |
