Legal Blog

The Weekly Scenario: Special Needs Trust

Question: How can I be sure my child will be secure that her needs are taken care of once others assume the role of guardian and/or caregiver?

Answer: In considering the needs of a child, particularly one who might have special needs, in addition to establishing a special needs trust, we often advise parents to create a letter or ‘memorandum’ of intent. The letter is used to further elaborate on important items that affect the child’s day to day needs, such as health care needs, doctors, therapists, educators and dentists. The letter is often used to impart knowledge to future caregivers that can provide details regarding the child’s history and even important personality traits which other caregivers might not be able to figure out easily on their own.

The letter is not legally binding and if it were to conflict with a legal document like the special needs trust, the legal document would have precedence.

Comment: It is often important in the drafting of a trust to consider a reasonable balance of interests. If a special needs trust is drawn up with too much specificity, it might lead a Trustee to believe that only the items mentioned in the trust are permitted. If a certain item is not mentioned, it might lead the Trustee to believe the settlor did not wish his child to have that item.

On the other hand, if a special needs trust is too general in nature, it might lead a Trustee to deny certain items to a beneficiary that the settlor would have wanted his child to have.

The letter of intent serves as a powerful source of information about a child for future caregivers, guardians, courts and others that are involved in the child’s life.

As always, if you have any questions or would like to learn more, please let me know.


Steve Shane Casual SmallSteve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.

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