How Can A Divorce Potentially Impact Our Child’s Special Needs Trust?
If you were to leave money for one child to manage for the benefit of your disabled child, you could be looking at a lot of potential problems. If your non-disabled child gets a divorce, in Florida, non-marital assets should not be part of any kind of equitable distribution that occurs. However, in practice, people who receive money this way tend to unintentionally create a commingled effect with their spouse and lose the characteristic of being a non-marital asset. If your non-disabled child does such a thing and accidentally commingles with a spouse that he is going to divorce, you could lose the money intended for your disabled child to your ex in-law. That is a massive risk you take in order to avoid the costs of creating a special needs trust.
What If The Child In Charge Becomes Incapacitated During The Life Of the Special Needs Child?
If the child who receives the money with the intention of using it for his disabled sibling becomes incapacitated, then the person named as the non-disabled child’s power of attorney or court-appointed guardian would have control over the money in the name of your non-disabled child. This fiduciary is required to use the money for the sole benefit of that now incapacitated child. The money will not be used for your intended purpose for your originally disabled child.
By avoiding the cost to utilize a special needs trust by disinheriting your disabled child and giving to a non-disabled child, that non-disabled child’s future incapacity will absolutely destroy your well-intentioned planning.
How Do You Decide To Name The Manager Of Your Child’s Special Needs Trust?
When deciding how to name the manager of your disabled child’s money, recognize that your disabled child may need more thoughtfulness and care than that which may be provided to him or her. You would think that a sibling would want to care for his or her disabled sibling, but that may not be the case. The sibling as a manager of money sometimes does not work as intended for a few reasons. First, the non-disabled sibling may have a grudge or jealousy of their disabled sibling, as it relates to money. The non-disabled sibling will see that you spent a lot more money on your disabled child than on your non-disabled child. The non-disabled child, if given that power and control over money, may justify being less thoughtful than you would be towards your disabled child. Another issue is that your non-disabled child may have a family of his or her own that will take priority over his sibling. Even though they may have good intentions, they will more likely than not pick their own children over their disabled sibling and may put the disabled sibling in a group home or a situation contrary to your wishes. It is important to take the time to discuss your intentions and to see if those intentions will be met.
How Do Lawsuits, Judgments Or Liens Impact A Special Needs Trust For My Child?
If you have a special needs trust and you name a non-disabled child as trustee, then whatever happens to the non-disabled child should not affect the money set aside for your disabled child. Under trust law, the money you leave to a trustee is not the property of that trustee. It is the property of that trust, which is managed by the trustee. If the trustee has any kind of financial problems or business problems, the money held in trust for a disabled child is not going to be affected.
If you were to disinherit your disabled child from your plan and just give more money to your non-disabled child, then the money would be exposed to any creditor claims, lawsuits, or judgments against the non-disabled child.
For more information on Impact Of Divorce On Special Needs Trusts, an initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (904) 398-6100 today.
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