Page 5 - White Paper-Estate Planning for Young Families

of money available to them when they reach adulthood, even if the surviving spouse
later remarries and/or has other children.

If this is important to you, you can leave specific assets or amounts of money in trust
for your children, with the rest going to your spouse, or you can create a trust that
preserves the asset (i.e., an income producing property or an interest in a business)
for your children but directs the income to your spouse for his or her lifetime.

Providing for a Child with Special Needs

Another consideration in creating an estate plan, is planning for children who are
disabled and who are or may be supported by government assistance in the future.
If your child is disabled as defined by the laws governing Social Security, upon
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their 18 birthday, he or she will be entitled to government benefits, including SSI
(Supplemental Security Income), Medicaid, housing, and other benefits. The
ability to qualify for these benefits is contingent upon your child’s assets, so it is
important that anything you leave for that child be structured so they are not
disqualified from receiving ongoing assistance throughout their lifetime.

A Special Needs Trust (“SNT”) is an irrevocable trust, established to support your
child, yet simultaneously allowing them to retain their government support.
Typically, an SNT can be used for anything that the government does not provide,
or in place of some (or all) of the government benefits. It can pay for clothing,
quality of life enhancements, vacations or outings, therapy, health insurance
instead of Medicaid, staying in the family home instead of government housing,
new furniture, etc.

An SNT can be established immediately or it can be testamentary, meaning it only
comes into effect after your death. The choice of which type to use depends upon
your circumstances. If you know that your child will receive an inheritance from a
relative, or know that your child will continue to have a qualifying disability as
defined by the criteria set forth in the Social Security Act when they reach 18 years
of age, then establishing an SNT today is a wise option. If your child is younger,

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