Understanding Divorce and the Child With Special Needs

Sadly, one out of every two marriages in the United States now ends in divorce. The many details involved in planning for a child with special needs in a divorce often fall to the wayside, as a myriad of other considerations consume the attention of parents and overshadow important decisions that must be made in the best interest of the child. As a result, parents often find themselves in the unenviable situation of not having a plan in place for their child when the divorce becomes final and each parent must manage independently.

Divorcing parents of a child with special needs have the enormous responsibility of making sure their child will have everything necessary to provide for ongoing quality care and that their child’s assets are protected. For this reason, the expertise of a Protected Tomorrows Advocate is invaluable toward helping families work through and understand the key considerations that must be addressed. Among the specific areas that require careful consideration are special needs trusts, estate planning, child support and future child support obligations, entitlement benefits and instruction letters.

Special needs trusts ensure that the individual with special needs receives consistent, quality care while maintaining eligibility to continue receiving government benefits. Also called supplemental needs trusts, the purpose of this trust is to supplement, but not take the place of, public benefits programs. There are two different types of special needs trusts. The third party special needs trust is a special needs trust which is created and funded by someone other than the individual with special needs. First party trusts are created by, or on behalf of, the individual with special needs using the individual’s own funds or property.

Revising an estate plan and its related documents should be one of the highest priorities for divorcing parents. Wills or revocable trusts, powers of attorney and beneficiary designations all need to be updated to remove the soon-to-be-former spouse. Property designated for a child with disabilities should be designated to transfer to a third party special needs trust. Beneficiary designations should be changed to name the third party special needs trust as the beneficiary. Gifts made to the child with special needs should be designated to the third party special needs trust itself, and not the child.

Properly establishing child support arrangements is critical and often is the area to which parents give their primary focus. A typical child support arrangement does not include payments from a special needs trust as a part of its calculations. Some courts may allow for a decrease in child support payments when funding comes from a special needs trust. Child support for children with disabilities may continue past the age of 18, depending upon state law. It should be noted that child support obligations typically do not end when the parent paying the support dies. In some states, future child support obligations can continue from the deceased parent’s estate.  It is extremely important that child support payments due and payable after the child’s 18th birthday be made payable, via a court order, to a 1st party special needs trust. Otherwise, the child support will be considered the child’s income and could reduce the government benefits available to him/her.

When applying for entitlement benefits such as social security, retirement, disability and survivor benefits, it is imperative that the custodial parent disclose that there is a child with disabilities involved. Failure to do so can seriously decrease, or potentially eliminate, these much-needed benefits that your child is entitled to receive.

It is important that the primary caregiver parent prepare a letter of instruction for the person designated to take their place in the event of their death or incapacity. This letter should include information such as your child’s physicians, regularly scheduled appointments, medications, test results, and other important health care and personal information. The individual who is handling estate planning arrangements should also receive a letter providing the location of all estate planning documents, life insurance policies and other important financial documents. A list of public benefits, contact information for any advisors and special instructions for the transferring of assets should also be provided.

Divorce is difficult even under the most amicable of conditions. Divorce involving a child with special needs can further complicate an already complex and emotional situation. Utilizing the services of a Protected Tomorrows Advocate will give you the expert guidance to make informed decisions and greatly reduce the stress and anxiety that come along with this life-changing situation.

Related Resources

“Every Kid Is a Special Needs Kid”

read article btn-icon

Coaching Myself Out of a Job: What to Expect When Working with a Job Coach

read article btn-icon