Wills and Trusts

A Will is a written legal document that provides for the distribution of property at death. A Will can also name a guardian for a minor child and designate a Trustee to handle an estate on behalf of minor children or others. Because of this function, every parent should have a Will. For parents of children or adults with developmental disabilities, the ability to appoint a Trustee and establish a Trust in a Will is especially important.

If an individual dies without a Will, his or her estate will be divided and distributed according to the state's laws of intestacy. Under Washington law, if a parent dies, survived only by his or her children, the parent's estate will be divided equally among his or her children. For a family with a disabled member, this equal division of property could be a grave mistake.

For individuals with disabilities, the direct inheritance of even a small amount of money may disqualify those individuals for Supplemental Security Income (SSI) or other state or federal financial or service benefits that would otherwise be available to them. In addition, inheritance of property by disabled individuals incapable of handling money or property may leave those individuals vulnerable to exploitation by others.

To prevent this from happening, parents of handicapped or incapacitated children or adults should have a Will which includes a Trust for the disabled individual. The disabled child or adult should receive no direct bequests in the Will, but his or her share should be directed into a carefully drafted Special Needs Trust established in the Will. Even a well drafted Trust cannot guarantee that an individual with disabilities will not be disqualified from receipt of government benefits, but it is one of the best ways to prevent disqualification.

A Special Needs Trust in a Will can provide some funds for items not covered by government benefits such as extra clothes, vacations, treats and gifts, but does not pass an ownership interest to the disabled beneficiary. Legal ownership remains with the Trustee.

Proper language in a Special Needs Trust is especially important and legal counsel should be consulted. Just as important in a Special Needs Trust is the choice of a Trustee. The Trustee is the individual who will manage the assets of the Trust and decide when and if a distribution should be make for the beneficiary with disabilities. As the Trust may continue for the entire life of the disabled beneficiary, the Trustee chosen should be roughly the same age as the beneficiary and an alternative Trustee should be designated. if possible. to provide continuity. The Trustee should also be familiar with the disabled beneficiary, so he or she will have some idea of the needs of the person.

If a Will with a Special Needs Trust is signed by an individual, it is important to remember to change all bank account, life insurance policy and retirement benefit beneficiary designations as well. to name the Trust as the beneficiary. Relatives and friends who may consider naming your disabled child or adult in their Wills should be advised that such a bequest, if not done properly may not be in the best interest of that person and will make your careful estate planning less effective. Any such bequest should also be made to a Special Needs Trust.

The above is intended to provide general information that may be useful to caregivers and family members of persons with developmental disabilities who are incapacitated. It is not intended to substitute for specific legal advice in individual cases.

PREPARED BY KAREN M. THOMPSON AND SUZANNE HOWEL, ATTORNEYS AT LAW,

1250 BANK OF CALIFORNIA, SEATT LE

WASHINGTON 98164

206 682 2333