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What You Need to Know About Special Needs Guardianships – Part 2

Published: September 1, 2022

You must know the key responsibilities of a guardian, once you understand how guardianship can help a special needs adult. Guardian duties vary depending on the protected person’s limitations and abilities. However, some general responsibilities tend to fall to all guardians, including:

  • Ensuring the protected person’s living situation is not only safe and appropriate but also the least restrictive environment
  • Providing for special needs adult’s daily basic safety and needs
  • Making routine and ordinary medical care appointments, decisions, and treatment arrangements
  • Providing for the adult’s future educational, recreational, and social needs
  • Applying for necessary benefits and health insurance
  • Advocating for the independence and legal rights of the ward

Guardianship Roles

A special needs attorney or disability lawyer will be able to outline the details of responsibility relevant to your state laws and benefit eligibility rules. For instance, parents can’t receive a Medicaid stipend to be their child’s caregiver and legal guardian.

What qualities do a guardian and successor guardians need to possess? Technically, any competent person over 18 may be a guardian. Parents will often request the court to appoint one or both of them as guardians. Even with two-parent guardianship, it is still necessary to select a successor guardian.

Successor Guardians

Conversations with potential guardian candidates must fully outline the responsibilities and necessary resources accompanying the role. One of the biggest issues to discuss is where the special needs adult will live. Possibilities include:

  • Independent living in a residential facility
  • At home
  • In the proposed guardian’s home

There are some instances when the guardian will move into the protected person’s home to promote and maintain the ward’s stability.

Letters of Intent and Financial Plan

When choosing a successor guardian, parents must prepare a letter of intent (LOI) providing information about family and friends’ roles in the child’s life and how to contact them. Include emotional factors, daily routines, and habits for continuity of the special needs person’s lifestyle. Your LOI should also have a funded comprehensive special needs financial plan and the appropriate legal documents that formalize and direct the plan’s implementation. This financial plan needs to include government benefits and how to ensure eligibility for these programs remains intact for the protected person.

Ending the Guardianship

A guardianship will end upon the death of the protected person or the death of the guardian. It may also end when a guardian is unable or unwilling to perform duties of guardianship. This situation requires a petition to the court that they no longer accept the inherent responsibilities, at which time the court will appoint another guardian.

The Financial Relationship Between Guardians and Trustees

Generally, a guardian is not personally financially liable or responsible for the protected person from their resources. However, the guardian or conservator usually is responsible for managing the individual’s financial resources. At times the guardian may share financial management duties with a representative payee or trustee from a special needs trust. It will depend on the parents’ special needs financial and estate plans regarding how money is managed. In the case of a special needs trust, a guardian will request funds from the trustee to maintain the protected person’s household and pay for vacations, trips, clothing, and other permissible expenditures for the ward’s benefit. It is mutually beneficial that the guardian and trustee have a trusting and respectful relationship since the trustee’s fiduciary responsibilities may conflict with a guardian’s financial request.

Talking to Those Who Want to Be Involved in the Protected Person’s Life

When and how do you go about asking someone to be a guardian? Guardianship planning is an important legal task for all parents but especially for those with a child with special needs. Open discussions and ongoing communication with individuals who wish to be involved in the special needs person’s future care are crucial for the best outcomes. There is much to consider as some people will be well-suited to a task while others will not. Spreading some tasks among family members is useful but identifying one guardian to act as a point of contact to represent the protected person’s needs fully is a must.

You may nominate this guardian in a will when a child is under 18 or if special needs, 18 and over. The court will still need to confirm the guardian after the parents’ deaths, but including the nominee in the will makes the parents’ preference known. It is possible to designate a standby guardian. Most states allow this designated guardian to care for their special needs child or adult if the parent becomes incapacitated or dies. If there is reason to believe this choice of guardian will be contested by the other parent or family members, the guardianship designation can receive pre-approval or confirmation by the surrogate or probate court before the parent dies. Not all states permit this pre-confirmation process; however, if it is available in the state where the child lives, the parent should nominate both a guardian in their will and designate a standby guardian.

Taking care of your children’s future is especially important and challenging when one is special needs. Proper planning with a special needs attorney or disability lawyer can ensure the unique requirements for your family member with a disability dovetail with the overall estate plan of your family. We hope you found this article helpful. If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.

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It is important to plan your estate to ensure that your assets, interests, and those you love will be protected after your death. However, without proper guidance and advice from a qualified estate planning attorney, many individuals make costly mistakes. Beyond undermining your intent and diminishing your financial legacy, poor planning can create additional stress to your heirs in their time of grief.

Six common errors frequently happen during the estate planning process. These mistakes often occur because the complete financial picture was not fully considered. It is easiest to avoid estate planning mishaps by knowing what they are before you begin or looking for these errors when reviewing and updating your plan.

Financial procrastination causes problems. While examining your mortality and making end-of-life preparations is not a particularly fun activity, try viewing it as helping and enhancing your loved ones' future lives while creating a sense of peace during your own. 

The need to protect your finances using wills, trusts, and power of attorney (POA) documents is not solely the domain of the elderly. Putting off the drafting of legal documents necessary to protect yourself and your inheritors can lead to disastrous outcomes.

By far, failing to create an estate plan is the most common mistake. Even if you do not have a lot of money, you need a will to protect any minor children you have by naming their guardians. Your will also ensures your asset distribution to heirs is carried out according to your intentions when you die and names a representative to handle debt obligations, final taxes, and other estate administrative duties. Dying without a will or "intestate" can lead to dire consequences.

Outdated wills, forms, and POAs create problems. If you made a will twenty years ago and have not reviewed and updated its contents, chances are many of the details no longer reflect current assets or beneficiaries. Estate planning is not a "set it and forget it" proposition. Reviewing estate planning documents and beneficiary forms every two years is generally adequate, barring a major life change such as divorce, birth, death, remarriage, or relocation to another state.

Beneficiaries without coordination can create expensive oversight. Beneficiary forms for retirement accounts like 401(k)s and IRAs, annuities, and life insurance policies may constitute a significant portion of your estate's assets. These beneficiary forms are legally binding and will supersede the contents of your will. Failure to update beneficiary forms can lead to an ex-spouse receiving assets that preferably would go to your heirs. Routine checks of all beneficiary designations are best practices for estate planning.

Failing to title trust assets properly can lead to probate. While not everyone requires a trust, those who do must carefully retitle their assets into the name of the trust. Forgetting to add more recently purchased property or opening a new account requires you to title them into the trust to receive trust benefits. Whether real estate, cash, mutual funds, or stocks, if you fail to move the asset into the trust, they become subject to the probate court, possible tax consequences (depending on the trust type), and a public record of these assets.

Life insurance can trigger estate tax. Life insurance can provide heirs with liquidity without the sale of assets and tax consequences when handled correctly. However, if a wealthy individual dies while maintaining ownership of their life insurance policy, they may inadvertently create a tax event for their heirs. Although life insurance death benefits are not subject to state or federal income taxes, any "incident" of ownership by the decedent can create an inheritance tax.

An estate planning attorney can help shelter life insurance proceeds from high-value estates by gifting the policy to an Irrevocable Life Insurance Trust (ILIT) or draft a new trust to purchase a new policy where the trust is the owner and beneficiary. A policy owned by the trust does not create a taxable situation to death benefits. Your attorney's careful structuring of this trust type is complex but can provide proper protection.

Joint ownership of assets with your children can lead to disastrous consequences. Naming your children as co-owners of assets, even digital, permits their creditors to access your money. The better way to address the situation is to give your adult child power of attorney and assign them as a beneficiary to a payable on death bank or brokerage account. This tactic permits them to access your funds if required during your lifetime. However, it keeps your assets from your child's estate and away from their potential creditors.

Ultimately the biggest error you can make is not finding the right estate planning attorney to guide you. This specialized attorney receives training on avoiding probate, tax implications, and asset protection if you require long-term care. Proper planning with the right guidance will help you avoid costly estate planning mistakes and protect your family's future financial well-being.

If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.

- Estate Planning Mistakes to Avoid

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