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What you need you know about special Needs Trusts and Estate Planning for your family’s future

Written by  Sussan, Greenwald & Wesler

Alex Hilsen is an attorney and Certified Financial Planner at Sussan Greenwald & Wesler.  In the following interview, he answers some of the most common questions he has fielded lately from his parents.

Q: Who needs to think about estate planning and special needs trusts – everyone, or just parents who have children whom they expect will not live independently as adults?

A: Everyone with a child should have an estate plan. It lays out or directs how your money will be distributed and who should care for your children in case of emergency or death.  If a parent believes that his or her child may eventually qualify for governmental benefits, then that parent may want a special needs trust. That parent should think about creating it when the child is young.

Q.  Does it make sense to address trust and estate issues if you don’t have a lot of money set aside right now?

A: Yes. You do not need to have a lot of income set aside to benefit from creating a trust or engaging in estate planning now. People often have assets they don’t consider–i.e, through pension plans, work, life insurance policies–sources they may not be aware of.

Q: When should I start planning?

A: It is never too early to start planning. It is impossible to predict life’s hiccups. Planning before a crisis often helps to prevent one.

Q: What is the biggest misconception about the state of the law in your field that parents make?

A: One mistake parents make in estate planning is to leave one child responsible for the trust administration for another child. This role may be overly burdensome; there are better options.

Also, parents often assume that all trusts operate in the same way. In fact, big differences exist and have significant monetary implications of which parents need to be aware before choosing a trust vehicle.

Q: Has the law changed recently in ways I should know about as a parent?

A: Yes. Recently, the Federal government passed the ABLE (Achieving a Better Life Experience) Act.  The act is intended to help the disabled individual save money for their use. While New Jersey has yet to adopt the legislation, we are closely monitoring developments and it is likely that the ABLE Act will significantly impact planning for disabled family members.

Q: Once I have a plan set up, is that it?  Or, do I need to follow up, and does someone need to monitor it over time?

A: While your plan creates a stable foundation, various life changes, and financial fluctuations necessitate that you revisit your plan from time to time to ensure that it continues to meet your family’s needs.

Q:  How much does it cost usually for a parent to address the trust and estates issues that pertain to their children?

A: While the cost may not be nominal, it is certainly worthwhile in light of the tremendous savings it provides over time and the peace of mind it affords loved ones.

Mr. Hilsen finds that parents are often surprised at how little time it takes to get an accurate assessment of what they need to do to protect their children with special needs.  Parents who have questions can reach Alex Hilsen by calling at Sussan, Greenwald & Wesler at 609 409-3500.