Divorce always has a major impact on estate planning, and after any divorce it is important to rethink and reorganize your estate plan to account for the fact that you are no longer married. However, the impact of divorce on an estate plan is even greater when you have a special needs child.
During your divorce, the most basic of agreements will be made regarding how you and your former spouse will split the financial responsibility of caring for your special needs child. You will also have court orders for custody and visitation. But what will happen if either parent dies or is incapacitated? And how will new issues created by the divorce settlement be handled?
Child Support & Public Benefits
If your child receives public benefits such as Social Security Income, Medicaid, or a Medicaid Waiver, child support payments can impact their eligibility for these programs. It is ideal, in this case, to create a self-settled or special or supplemental needs trusts for your differently-abled child, and to have the child support payments deposited directly there. If handled properly by an estate planning attorney who is familiar with special needs matters, this can help you avoid a reduction of the available benefits.
Guardianship
If your special needs child is a minor, custody will be determined by the property settlement agreement in the divorce. However, if you care for your adult special needs child, you will need to have a guardianship proceeding do determine whether one or both of you will have the authority to address your adult child’s medical and housing needs. The court will also need to determine what will happen if the guardian dies or is incapacitated. Will the other parent take over? Someone else?
Life Insurance
If you get a divorce, you will need to review, and likely make changes to, any life insurance policies you may have. You can make a sub-trust as part of your Will or a revocable living trust to benefit your special needs child, and direct your life insurance proceeds there so that the money can be used to your special needs child’s benefit.
Beyond the basics listed above, there are many more considerations that need to be made regarding your special needs estate plan during and after a divorce. You should certainly engage a divorce lawyer to represent your interests in divorce proceedings, but you should also partner with an experienced special needs estate planning attorney. The Matus Law Group is here to help. Give us a call at (732) 281-0060.
