When you think about estate planning, you may think about writing a will, deciding who inherits your assets or determining what happens to your home after you pass away. 

But estate planning is about more than distributing property. It’s also about protecting the people you love and preparing for the possibility that you may no longer be able to make decisions on their behalf. 

For parents of minor children, that means considering who would care for their children and manage assets intended for them. For families supporting a child or adult with special needs, planning may involve additional considerations related to decision-making, financial security, long-term care and eligibility for government benefits. 

Although these are two distinct areas of planning, they share an important principle: A thoughtful plan can help prepare your family for circumstances you cannot predict. 

In the latest episode of Elder Law Out Loud, Family First Firm explores these two important planning topics and the tools families should understand. 

Planning for Minor Children: Who Would Care for Them? 

Parents make countless decisions to protect their children and prepare them for the future. Yet one of the most important questions can be difficult to consider: 

Who would care for your children if you were no longer able to? 

If both parents pass away or become incapacitated, the arrangements for minor children can become complicated without appropriate legal planning. 

1. Consider Who Would Serve as Guardian 

Parents should thoughtfully consider whom they would want to care for their minor children if they could not. 

Naming a preferred guardian in an estate planning document can communicate your wishes, although the court generally retains authority over the appointment. The applicable legal requirements and circumstances matter. 

When considering a potential guardian, think about more than who loves your children. Consider the person’s values, ability to provide care, location, willingness to take on the responsibility and relationship with your children. 

It’s also wise to discuss your wishes with the person you have in mind before naming them. 

2. Plan for the Management of Your Children’s Inheritance 

Minor children cannot manage inherited assets in the same way adults can. Depending on how the assets are transferred, a court-supervised arrangement, such as guardianship, may be necessary. 

A will or trust can help establish a framework for managing assets for a child’s benefit. The appropriate strategy depends on the family’s circumstances and the type of assets involved. 

Consider these questions: 

• Who should manage the money intended for your children? 

• How should those funds be used for their care, education and other needs? 

• At what ages or under what conditions should your children receive control of inherited assets? 

Leaving money to a child is not the same as establishing a plan for how that money will be managed. 

3. Plan for More Than One Possibility 

Estate planning should consider not only what happens if you die, but also what happens if you become incapacitated and cannot manage your affairs or care for your children. 

Different legal documents address different situations. A comprehensive plan should be tailored to your family’s needs rather than relying on a single document to accomplish everything. 

Special Needs Planning: Protecting Children and Adults 

Special needs planning addresses a different set of considerations. Its purpose is to help provide for a person with special needs while taking into account their individual circumstances, support requirements and any government benefits they receive. 

Importantly, special needs planning isn’t just for children. It may be equally important when planning for an adult with special needs, particularly when family members are preparing for future caregiving and financial responsibilities. 

1. Understand Powers of Attorney and Guardianship 

Families may need to consider who can make financial, medical or other decisions when an individual needs assistance. 

A durable power of attorney allows an individual to authorize another person to act on their behalf within the document’s scope and applicable law. Whether it is appropriate depends on the individual’s legal capacity, the decisions involved and the relevant legal requirements. 

Guardianship is different. It is a court-supervised legal arrangement that may authorize a guardian to make certain decisions for a person who has been determined to need that protection. 

Neither option automatically applies in every situation. 

For example, when a child with special needs approaches adulthood, parents should not assume they will automatically retain the legal authority to make decisions for their adult child. The appropriate arrangements depend on the individual’s abilities, circumstances and applicable law. 

Families should seek legal guidance to understand which options may be appropriate and whether less restrictive alternatives are available. 

2. Understand Supplemental Needs Trusts 

A supplemental needs trust, also known as a special needs trust in certain contexts, can be an important component of planning for someone with special needs. 

These trusts are designed to hold and manage assets for a beneficiary under terms intended to address their needs and, where applicable, preserve eligibility for certain means-tested government benefits. 

Why does this matter? 

An outright inheritance, gift or other transfer of assets may affect eligibility for programs with financial eligibility requirements. A properly structured trust may provide a way to manage assets for a beneficiary while addressing those considerations. 

However, not every trust protects eligibility for every benefit. The trust’s terms, how it is funded, the source of the funds and the applicable program rules all matter. 

A trust should be drafted with the beneficiary’s circumstances and long-term needs in mind. 

3. Think About the Person’s Long-Term Future 

Special needs planning is not limited to a single legal document or financial decision. 

Families may need to consider: 

• Who will provide or coordinate care? 

• Who will manage financial resources? 

• What decision-making support may be appropriate? 

• How could an inheritance affect eligibility for means-tested benefits? 

• What happens when a parent or primary caregiver can no longer provide support? 

• How should the plan adapt as the individual’s needs change? 

These questions can be difficult, but addressing them early may give families more time to evaluate options and coordinate appropriate support. 

Why These Planning Conversations Matter 

Planning for minor children and planning for a person with special needs are not interchangeable. Each requires its own strategy, and a family’s plan should reflect the specific needs of the people involved. 

For parents of minor children, the focus may be on guardianship, managing inherited assets and providing direction if the unexpected happens. 

For families supporting someone with special needs, the focus may also include long-term financial management, decision-making arrangements, caregiving and government benefit considerations. 

In both situations, the goal is to provide clarity about your wishes and establish appropriate legal and financial arrangements before a crisis occurs. 

Start the Conversation with Family First Firm 

You don’t have to wait for a major life change to begin planning for the people who depend on you. 

Whether you’re a parent of young children or helping a loved one with special needs prepare for the future, understanding your options is an important first step. 

Listen to the latest episode of Elder Law Out Loud for more insight into minor children planning, special needs planning, powers of attorney, guardianship and supplemental needs trusts. 

If you have questions about your family’s circumstances, Family First Firm can help you understand your planning options and determine what steps may be appropriate.