Special needs trusts

The Wall Street Journal recently included an article on special needs trusts.

Here's a bit of statistical information from the article:

More than 41 million Americans, or almost 15% of the population age 5 and older,
have some type of disability, according to the 2007 Census survey data. Some 6.2% of children age 5 to 15, or 2.8 million children, have disabilities, the Census Bureau found. And individuals with disabilities are living longer than ever before. That means that many disabled children will outlive the parents who support them.

To address the future needs of such children when they become adults and especially after their parents are gone, parents can prepare documents for the health-related and financial well-being of their children. Parents should consider special needs trusts, sharing information with relatives for the relatives' estate plans which may benefit the child with disabilities, powers of attorney or guardianships, and letters for caregivers. Because the laws regarding special needs trusts are complicated and vary from state to state, it is highly adviseable that parents check with a well-qualified attorney when they wish to explore or pursue such a trust.

One starting point, especially for those with modest-sized estates, is the Wisconsin Pooled and Community Trusts (WisPACT) website. WisPACT is a special needs trust with subaccounts for individual beneficiaries, where each subaccount may be relatively small, but the pooled assets of all the beneficiaries can be professionally invested and managed.