How Much Should I Put Into My Child’s Special Needs Trust?

Excerpt from: NAELA News (click for full article)

 

An issue families often find challenging is how to split their estate among their children when one child is disabled and other children are not. This subject alone could take an entire book. Parents often struggle with their attempts to be fair to all of their children. The fact is, children are not created equal, whether they are disabled are not. In many cases, it might be more prudent, at least initially, to dedicate more of the estate to the disabled child’s special needs trust than to the nondisabled child’s share. The children who are not disabled presumably would have more earning capacity than their disabled sibling, especially if the parents contributed to their education. This balancing act is nothing new to parents of disabled children. In many instances it is very difficult to accommodate all children fully, especially when the family has limited resources. Parents must look at the equities and make a pragmatic decision, which is easier said than done. Parents must try to avoid making decisions based on guilt. A common approach is to purchase life insurance to make up the difference or fill in the gaps, which can be a short-term or a long-term solution, depending on the situation and the type of insurance purchased, whether it be “perm,” or “term.”