There are some legal issues you may want to consider if you feel your child will not be able to take care of him/herself or will be very delayed when they become of legal age.
What Is It: A guardian is appointed by the probate court in order to make personal and medical decisions for an adult who is unable to make or communicate appropriate decisions. A conservator is appointed by the probate court in order to take care of financial matters for a person (minor or adult) who has assets that are likely to be wasted due to the person’s inability to make appropriate decisions concerning their own finances.
When do you go for full guardianship?
The process: There are significant legal procedures to go through. While it can be done without the aid of an attorney, an attorney will be appointed for the proposed ward/protected person and it may be a good idea to at least consult with an attorney. There are court documents (pleadings) to fill out and file including disclosure of the guardian and/or conservator’s background. Even after appointment, the guardian must file a yearly report with the court along with a medical evaluation to make sure (1) that a guardian is still needed and (2) that the guardian is doing his/her job correctly. A conservator may have to file yearly accountings to make sure that the protected person’s funds are being taken care of. The conservator will also have to qualify for a fidelity bond in order to protect any funds that are not in a court controlled account. Some of the attorneys who handle these cases can be found under the heading: Elder Law attorneys or Probate attorneys. The process can be expensive although there are waivers of costs for persons who do not have much funds. The process can take approximately 45 days to complete if there are no problems. The time can significantly expand especially if there are any objections made either about whether the procedure is necessary or who should be the guardian and/or conservator.
Minor Approaching Adulthood: The process can be started for an adult guardianship for a disabled minor at age 17 years and 6 months to take effect at age 18 in case it is important to have the guardian in place immediately at age 18.
The purpose: Without a guardian, your child who has turned 18 will be presumed competent and you will not be able to make decisions for that child. You may not be able to get any medical information and your child is legally able to make his/her own decisions for personal matters. Without a conservator, your child may be presumed to be competent to make decisions and can spend his/her money however they want. It may be difficult to undo bad transactions and there are plenty of predators to take advantage of your child. These appointments essentially allow you to continue acting with the authority that a parent has over their minor child until that child is able to handle things by themselves.
What Is It: Estate planning is the preparation of documents which will guide you and/or your family when and if you become incapacitated or when you pass away. You can make written declarations which the probate court will abide by if you plan ahead.
Who does It: Estate planning lawyers generally handle these types of matters. Some lawyers who do general practices offer some estate planning work but may not be familiar with all the tools available for disabled children. There are others who do estate planning work but you should determine whether they are educated in these matters.
What kinds of estate planning tools are there: The basic documents you can use for estate planning are Wills, Trusts and Powers of Attorney. They are not mutually exclusive. A Will can put funds into a Trust and a Trust can be modified by a Will if the Trust says it can.
Wills: Wills are simply documents which say what you want to happen to your assets (estate) after you pass away. You are allowed, in a Will, to name the person you would like to be guardian and/or conservator for your child. You can set aside money for your child in a “Special Needs Trust”.
Special Needs Trust: A trust for a disabled person who is receiving governmental assistance which could be impacted by the availability of additional funds. The Special Needs Trust gives the Trustee (caretaker of the Trust) discretion and authority to use funds for the child (beneficiary) or not if it will impact the government benefits. The government cannot force these funds to be used so the Special Needs Trust acts like a supplement to the governmental benefits received by the child. There are two types however: first party and third party. A first party Special Needs Trust is set up with money owned by the child. There are federal laws impacting such a trust which also make the remainder of the trust, after the child passes away, subject to collection by the government agencies which provided the child benefits. A third party Special Needs Trust is set up with someone else’s money and is not subject to collection after the child passes away. The trustee of the trust needs to be trustworthy and educated on the types of payments that can be made without hurting the child’s eligibility for governmental benefits – especially if the benefits are life saving. A Will can leave funds to a Special Needs Trust already set up or the Will can set up its own Special Needs Trust.
Living Trust: A trust is essentially a separate legal entity created by an agreement between you and the trust on what the trust does and what authority the trustee has. You can set these up while you are living and transfer your assets into it to avoid probate. Probate is the court process of using a Will to transfer assets out of the name of the deceased person and into someone else’s name. Living Trusts do not typically need probates (as long as the title to all of your assets have been previously transferred into the trust’s name). Some trust preparers use the prospect of probate as a means to scare people away from Wills. Usually the cost of the trusts is nearly the same as the cost of a probate. There are good reasons to do a Living Trust but it shouldn’t be because of fear. Also, beware a “one size fits all” trust that might look good and have a fancy binder but is far more than what is needed. Additionally, Living Trusts can contain Special Needs Trusts or other protections for your disabled child.
Powers of Attorney: Powers of attorney are documents that give a person or persons authority to act for the person who signs the power of attorney when they are unable to or if they need additional help. These documents usually give broad range of authority for medical purposes or for financial purposes and they usually survive incapacity. These powers of attorney can be substitutes for guardianships or conservatorships for your child if your child is able to understand them. That would make them much cheaper and efficient vehicles to handle matters for your child. However, if your child signs a power of attorney, your child is not giving up his/her own right to control his/her own actions. Plus the child always has the right to revoke the power of attorney as long as he/she is still competent.
ABLE Accounts: An ABLE Account is a savings account for individuals with disabilities with onset before the individual turned 26 years of age and who are receiving SSI and/or SSDI. The idea is that the limitations in money on hand makes the individuals have to spend their money and perhaps wastefully to stay qualified for assistance. The ABLE Account allows the disabled individual to save and to have gifts so that the individual can actually save up for things and/or to have money for other things that are needed. There is a $15,000 limit (as of 2018) to contributions in a single year which can come from gifts or from the individual. The first $100,000 does not affect the eligibility for government assistance. After that, states have their own rules but some allow contributions up to $300,000. However, putting more than $100,000 would affect eligibility for SSI recipients who would not get any payments from SSI until the funds went back to $100,000. Additionally, these accounts, like the first party special needs trusts, are subject to reimbursement back to the government for repayment of assistance. The payments that can be made from the ABLE Account include education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services and other expenses which help improve health, independence, and/or quality of life.
Guardian vs. Conservator: A guardian is appointed by the probate court in order to make personal and medical decisions for an adult who is unable to make or communicate appropriate decisions. A conservator is appointed by the probate court in order to take care of financial matters for a person (minor or adult) who has assets that are likely to be wasted due to the person’s inability to make appropriate decisions concerning their own finances.
Private Fiduciaries: At some point, you and your spouse may not be able to help your child. There will be sickness, disability and/or death. There has to be planning as to whom is going to watch over for your child. These decisions are often made in Wills or Trusts as to replacements for you and your spouse. Some people have family members or friends they can rely on. Some people put the funds in the hands of financial institutions which might handle the finances but they often don’t offer personal service. There are professionals who can step in. Private Fiduciaries are paid professionals who are licensed by the state to act as fiduciaries for individuals in need. They do get paid but their services can be invaluable. Of course, you have to find the right person for the job and even have a backup in place. Other professionals may also fill the role such as care managers or nurses.