Common Mistakes in Planning for a Loved One with Special Needs

Planning for a loved one with special needs is one of the most important yet complex journeys a family can undertake. Without the right guidance, even well-meaning family members may make decisions that ultimately hinder their loved one's financial and personal well-being. At Hsiao Law serving families in Clairemont Mesa, we’re committed to supporting their special needs journey, bringing clarity and peace of mind to protecting a loved one now and in the future.

Why Is Special Needs Planning Important?

Special needs planning is essential to protect your loved one's eligibility for benefits, create a sustainable care plan, and set up a support system that will last a lifetime. Special Needs Attorney Amy Hsiao, who has helped many families in Clairemont Mesa, understands the unique challenges that come with this planning. She can provide both the legal tools and personal guidance to support your loved one's future.

What Estate Planning Challenges Can Arise for Those with Special Needs in California?

A NYTimes article shares the story of an adult woman with a disability in California who received a re-determination letter from the Social Security Administration (SSA), triggering a rigorous review of her benefit eligibility. This process, which California administers strictly, requires individuals to verify their lack of access to additional resources that might disqualify them from benefits. During a routine phone interview with California Medi-Cal, the woman mentioned a trust created by her late father as part of his estate plan. This small mention led the SSA to launch an exhaustive investigation into her financial situation.

The process was stressful and complex for both the woman and her family, as they had to coordinate with multiple attorneys in two states to ensure compliance. The original trust attorney, based in Indiana, had to collaborate with a special needs attorney in California who was familiar with California’s aggressive eligibility policies. This case underscores the need for frequent reviews of special needs trusts and estate plans to avoid complications with public benefits eligibility.

The Special Needs Alliance outlines ten common mistakes that special needs families in cities like Clairemont Mesa make when planning for their children and loved ones with disabilities.

1. Not Creating a Life Care Plan

The first step in effective special needs planning is developing a Life Care Plan. A Life Care Plan outlines your loved one’s needs, lifestyle preferences, and financial requirements over time. It’s crucial to estimate these costs and identify funding sources early on. Families often skip this step, but by consulting a professional to create a Life Care Plan, families in Clairemont Mesa can better secure their loved one's future.

2. Leaving Assets Directly to a Special Needs Beneficiary

A common mistake parents make is leaving assets directly to their child with a disability through beneficiary designations or other pay-on-death benefits. This can unintentionally disqualify them from means-tested benefits like SSI (Supplemental Security Income) and Medicaid. By placing assets into a Special Needs Trust, parents can ensure their loved one retains their benefits while still benefiting from the family’s assets.

3. Dividing Assets Equally Among All Children

It may feel fair to split your estate equally among your children, but this can be problematic if one child has special needs. A child with disabilities may have additional financial requirements throughout their life, so considering their unique needs first is often a better approach. Consulting with an estate planning attorney, such as Amy Hsiao, can help families make these determinations effectively.

4. Not Reapplying for Medi-Cal Benefits After the Child Turns 18

If a family applies for SSI before their child with a disability turns 18, the application may be denied due to household income. However, after the child reaches adulthood, they may be eligible for benefits based on their own income and assets. Reapplying at the right time can make a big difference.

5. Overlooking Additional Public Benefits

Many families miss out on other public benefits, such as food assistance or housing support, which could significantly improve their loved one's quality of life. At Hsiao Law, we help Clairemont Mesa special needs families explore all possible public benefits and incorporate them into a comprehensive plan.

6. Not Setting Up a Living Will and Power of Attorney

Preparing legal documents like a Living Will and Power of Attorney for your loved one can help them avoid unnecessary guardianship in the future. For individuals who can make decisions with some support, having a Power of Attorney can allow a trusted family member to assist with medical and financial decisions.

7. Pursuing Guardianship When It’s Not Necessary

For some families, guardianship may not be necessary if supported decision-making is a viable option. Supported decision-making allows a loved one to make decisions with the help of a trusted individual, avoiding the loss of legal rights that comes with guardianship.

8. Failing to Obtain Guardianship When It’s Needed

In cases where a loved one lacks the capacity to make their own decisions, guardianship may be essential. If your child turns 18 and is unable to manage their own medical or financial affairs, guardianship can ensure they have the support they need. Read more in our article, How Successful Guardianship Can Support Special Needs Planning Working with an attorney like Amy Hsiao can help determine whether guardianship or Power of Attorney is the best choice for your loved one.

9. Relying on Family Members Without a Clear Plan

While family members, such as siblings, often want to help a loved one with special needs, it’s essential to have a structured plan. Siblings may face unexpected challenges when taking on this responsibility, so establishing a clear plan, including the creation of a special needs trust, can help set realistic expectations and prevent misunderstandings.

10. Waiting Too Long to Start Planning

Lastly, one of the biggest mistakes families make is waiting too long to start planning. The longer families delay, the less likely they are to save enough resources for their loved one's care. Early planning gives families in Clairemont Mesa peace of mind and allows them to set aside the necessary resources.

Start Special Needs Planning with Hsiao Law Today

Special needs planning is complex but absolutely essential for the long-term well-being of your loved one. Estate Planning Attorney Amy Hsiao has a strong background in helping special needs families in Clairemont Mesa navigate these important decisions with compassion and expertise. Let her help you avoid these common mistakes and create a sustainable plan that supports your loved one's future. Begin planning for your loved one’s future by scheduling a call online with our team.