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How to avoid common pitfalls with a special needs trust

California parents who have special needs children have unique challenges when they're doing their estate planning. That's why it's essential to have an experienced California estate planning attorney guide you through the process and help you avoid some common mistakes.

Following are some of these mistakes and how they can impact the future not only of your special needs child, but of their siblings and other family members:

-- Not having a revocable living trust: Many people establish a special needs trust for their child within their will. However, these can become public record and sometimes be accessed via the Internet. This can leave your children vulnerable to those who would take financial advantage of them. It's important to establish a separate trust so that it can't be accessed by anyone who doesn't need to see it.

-- Choosing a trustee from within the family: It's common to choose family members as trustees in most situations. However, trusts for people with special needs are more complex. Mistakes in distributions can disqualify the person for government benefits. It's better to engage a trust company or bank that knows the laws and keeps up with changes.

-- Not providing sufficient assets for the trust: Remember that the funds in the trust may need to last your child for a lifetime. Often, parents purchase a permanent life insurance policy. The younger the parents are when they do that, the less expensive the policy will be. Don't rely on your other children to provide financial support for their special needs sibling.

-- Not inviting others to contribute to the trust: Although you normally shouldn't place all of the financial burden of caring for your child on others in the family, it's a good idea to invite them to make gifts to the trust or to name the trust as a beneficiary of their retirement accounts or life insurance policies.

Your California estate planning attorney can advise you on your special needs trust based on your own unique family and financial situation. He or she will also help you keep it up to date as circumstances and laws change.

Source: Yahoo! Finance, "6 Planning Mistakes You Can Avoid If You Have a Special Needs Child," July 06, 2016

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