Ensuring the Future of a Child with Special Needs Through an Enduring Power of Attorney and a Will By Amir Segal, Adv.

Ensuring the Future of a Child with Special Needs Through an Enduring Power of Attorney and a Will
By Amir Segal, Adv.

Introduction: Securing the Future of a Child with Special Needs

In families with a child who has special needs, the concern for their future becomes even more pressing when parents are no longer present or lose legal capacity. Children with disabilities require not only financial resources but also personal, emotional, and therapeutic support to ensure their daily well-being.

For this reason, it is crucial to plan ahead—wisely and comprehensively—how assets, finances, and rights will be managed for the benefit of the special needs child. Effective oversight mechanisms should be put in place to ensure their interests are protected.

Through proper planning and the use of suitable legal tools, parents can enjoy peace of mind knowing that in case of incapacity (due to illness or accident) or death, their child will continue to receive the necessary care and financial protection.

Part 1: Legal Challenges and Considerations

1. Legal Capacity and Asset Management

• Children with special needs may be limited in their ability to manage assets or make legal decisions. In some cases, appointing a guardian or creating a protective legal framework such as a trust is necessary.
• Additionally, various market forces and legal regulations (such as tax rules) may limit the child’s eligibility for benefits if funds or assets are held in their name without proper planning.

2. Emotional and Family Considerations

• Beyond legal issues, this is a deeply sensitive and humane matter. Parents want assurance that their special needs child will receive appropriate care, and that siblings or other relatives will not be burdened unreasonably—financially or personally—with caregiving responsibilities.
• Such situations can create conflicts among siblings over how care is provided and how resources are allocated.
• It is essential to create a coordination mechanism within the family to ensure that everyone’s needs and wishes—especially those of the special needs child—are respected, while minimizing potential tensions.

3. Preventing Disputes and Legal Uncertainty

• In the absence of advance planning, potential heirs may clash over asset management and the care of the child. Legal tools such as trusts, a well-drafted will, or an enduring power of attorney can significantly reduce the risk of costly legal battles.
• Flexible financial arrangements that provide long-term support—from medical treatment to housing or nursing care—should be considered.

Part 2: Living Trusts and Their Establishment

1. What is a Living Trust?

• A trust is a legal arrangement in which a person (the settlor) transfers assets to a trustee to manage on behalf of a beneficiary—in this case, the child with special needs.
• A living trust is created during the parents’ lifetime, allowing assets to be gradually transferred without waiting for death. This enables oversight while the parents are still legally competent and allows adjustments as needed.

2. Advantages of a Living Trust

• Flexibility: Parents can adapt the trust terms to the child’s personal and medical needs.
• Continuity: Upon the parents’ death or incapacity, the trustee continues managing the assets without the need for probate or appointing a new guardian.
• Preserving Eligibility for Benefits: If the child receives disability benefits or social assistance, holding assets directly may jeopardize their eligibility. A properly structured trust can preserve these entitlements.

3. Choosing a Trustee and Trustee Responsibilities

• A reliable trustee with financial and legal expertise should be appointed to manage funds in the child’s best interest. Often, a professional trustee (e.g., lawyer or trust company) is appointed alongside a family member to balance responsibilities.
• Trustees must act in good faith for the benefit of the child and provide reports to pre-designated parties, such as a family oversight committee or the court, depending on the terms of the trust.
• When appointing an external trustee, it is advisable to also designate a family member as a trust protector, with authority to ensure the trustee is fulfilling their duties properly.

Part 3: Enduring Power of Attorney

1. Definition and Purpose

• An enduring power of attorney (EPA) is a legal document that allows a person (the donor), while still competent, to appoint someone to manage their financial, personal, or medical affairs if and when they become incapable—temporarily or permanently.
• This tool is especially important for parents of children with special needs. If the parent loses capacity, continuity in managing both the parent’s and child’s affairs is preserved.
• The EPA can specify who is authorized to care for the child, allocate resources, provide instructions for care, and even appoint a successor attorney in case the first is unable to act.

2. Tailoring the EPA to Family Needs

• The parents can include detailed instructions regarding the child’s financial affairs, medical decisions, and daily support needs.
• The appointed attorney can be a professional or a trusted family member who understands how to ensure the child receives continued support.

3. Benefits of an EPA

• Without an enduring power of attorney, if the parent becomes incapacitated, the family may need to go to court to appoint a guardian—a burdensome and bureaucratic process that may result in appointing an unsuitable person, causing harm to the child and emotional distress for the family.
• An EPA reduces this risk by defining the mechanism and responsibilities in advance, offering legal certainty and peace of mind.

Part 4: Wills and Mutual Wills

1. What is a Mutual Will?

• A mutual will is a coordinated arrangement between spouses where each spouse writes a will with reciprocal instructions—typically leaving all or most assets to the surviving partner, with final distribution to children or other beneficiaries after both pass away.
• This tool helps protect the surviving spouse and ensures the distribution of assets—including those intended for a special needs child—is carried out according to the couple’s wishes.
• These protections can also be established in a regular (non-mutual) will.

2. Incorporating the Special Needs Child’s Needs

• A will can include specific provisions for allocating assets and resources to benefit a special needs child. A common method is to establish a testamentary trust within the will, outlining the assets allocated, identifying the trustee or method of selecting one, possibly appointing a trust protector, and providing care instructions.

3. Legal Advice and Will Preparation

• A mutual or special needs-focused will is more complex than a standard one. It is highly recommended to consult a lawyer experienced in estate and family law to ensure the provisions are valid, executable, and tailored to the family’s needs.

Part 5: Additional Considerations and the Importance of Integrated Planning

1. Protecting Benefits and Entitlements

• Children with special needs often qualify for disability allowances or other benefits (e.g., subsidized treatments, housing). Poor planning can jeopardize these entitlements.
• Consult tax advisors and social benefits specialists to ensure that the chosen mechanisms—be it an EPA, living trust, testamentary trust, or others—do not result in the loss of crucial benefits.
• Balanced and well-planned distribution, with attention to tax issues (e.g., inheritance tax abroad, capital gains, purchase tax), can reduce unnecessary financial burdens and help maintain family unity.

Part 6: Practical Recommendations and Summary

1. Start Planning Early

Even if the child is young, begin preparing a protection and asset management framework early. This allows for time to refine instructions over the years and adapt to changing needs.

2. Professional Legal and Financial Guidance

Work with lawyers specializing in estate, family, tax, and property law, alongside accountants and tax advisors, to develop a thorough legal and financial plan.

3. Careful Selection of Trustees/Attorneys

Choose individuals or institutions you fully trust and who are capable of handling the complexities of caring for a child with special needs. Include mechanisms for oversight, reporting, and appointing a trust protector if needed.

4. Keep Documents Updated

Circumstances change. Regularly review and update all legal documents—trusts, EPAs, wills—to ensure they remain valid and relevant.

5. Consider Mediation When Needed

If family members disagree about caregiving responsibilities or financial arrangements for the child, consider mediation to avoid long-term conflicts and preserve family harmony.

Note: This article is intended for general informational purposes only and is not a substitute for specific legal or tax advice. For individual cases, it is recommended to consult professionals specializing in family and tax law.

Legal Disclaimer

This article is for informational purposes only and does not constitute legal advice, a legal opinion, or a recommendation for action. It should not be relied upon as a substitute for specific legal consultation tailored to individual circumstances. Reading this article does not create an attorney-client relationship, and the author or law firm is not liable for any damages resulting from reliance on this information. For legal advice, consult a qualified attorney.