Special needs trust

[usound76]

What is the name of your state (only U.S. law)? Kentucky

I have a 5 year old daughter that is mentally and physically impaired, & I am divorced from her father. I currently have my 403(b) and life insurance beneficiaries listed as my parents since she is a minor. I want to make sure that her father doesn't get his hands on this money, should anything happen to me. Someone had suggested a "special needs trust" for her. I can't afford an attorney right now, so I would like some insight into this.

Also, would her father automatically gain custody of her if something should happen to me? My cousin and her husband have offered to take custody of her if I should die (they are both pediatric physical therapists). Her father is remarried and his wife is AWFUL to my daughter. If I request in a will that my family members gain custody, will the courts take that into consideration? I appreciate your answers!What is the name of your state (only U.S. law)?

 

[candg918]

You cannot will custody of a child. You need an attorney to assist in setting up documents stating your preferences, but it is quite possible that a judge will give custody to her father. Realistically, your Ex's wife will have a great deal of influence on him as to whether to take custody; if she is not now happy about assisting in her care, she will not likely to be willing to do so if your daughter is with them full time.

It is essential for her future that you create a special needs trust; it is key to allowing any inheritance to be used in a manner which would still allow her to receive government benefits such as SSI and Medicaid if she is qualified for these programs.

Your local charity for the mentally and physically handicapped may know of attorneys who will draft a special needs trust at a cost based on your ability to pay. Also look to your local law school's legal clinic. While an attorney is always the preferred way to go, there is a SNT available from one of the legal document services.

One of the problems that an attorney should be sure to help you with is completing the beneficiary designation forms for the insurance and 403B. I have found one of my insurance companies to have difficulty accepting the SNT as a beneficiary in spite of having an EIN number for the trust and supplying the trust document to them.

 

[usound76]

What happens to her if my ex decides not to take custody? Does she become a ward of the state, or does my family have the right to take custody? My ex has already hinted around at motioning to terminate his parental rights. He only sees her 4-7 hours a month and she doesn't know who he is. How would this be affected if I get married in the future? Would he have rights as her step-father? I just want to make sure she is loved and provided for in my absence.

 

[candg918]

Your new spouse will not automatically get custody; if he were to adopt her, the issue with your ex would disappear.

You need what in some states is referred to as a "standby guardianship"; this would give placement of her until a court could decide. This would best be drafted by an attorney to prevent any errors.

It is really important that you get good legal and estate planning advice from an attorney experienced in disability planning. You want to protect her ability to access state services (such as SSI) even if she is placed with a family member or lives a independently as possible as she ages. A special needs trust is part of this planning.

If you are unable to find a social service agency which educates parents on these issues, ask your school district's coordinator for services for the disabled for suggestions on groups in your area.