When a client has a disabled or mentally challenged child, financial advisors need to take care when planning the child’s future, a MetLife executive points out.[@@]
Under federal rules, a special-needs child who inherits an estate worth more than $2,000 would lose access to government assistance such as Social Security or Medicaid. They would even have to pay back any government benefits they had received up to that point.
Advisors can better serve these clients by getting to know local attorneys experienced in setting up special-needs trusts, points out Nadine Vogel, a MetLife Inc. vice president and founder of its Division of Estate Planning for Special Kids, known as MetDESK.
These financial instruments, also known as supplemental trusts, enable parents to provide for a special-needs child after the parents are gone without risking the child’s qualifications for government-funded medical care and other benefits.
Financial planners and advisors can best help by showing parents affordable ways to finance the trusts, Vogel says.