What Is a Letter of Intent, and Why Is It Important in Special Needs Planning?

Providing for a child or loved one with special needs can be challenging. If you leave them a large inheritance, it could make them ineligible for government benefits. A Special Needs Trust can solve the problem. However, you want to ensure that you include a Letter of Intent with the Special Needs Trust to ensure your loved one is well cared for after your death. A Palm Springs estate planning attorney can help you prepare both documents.

What Is a Special Needs Trust in California?

A trust is an estate planning tool that manages property for the benefit of specific beneficiaries. The property and income from a trust pass to the beneficiaries outside of probate. There are many types of trust agreements for different situations and goals.

A Special Needs Trust manages property for someone with special needs or disabilities. When created, executed, and funded correctly, the trust provides funds for a disabled person without making them ineligible for government benefits. Government benefits may include Social Security, SSI, or SSDI (disability income) and food assistance.

What Is a Letter of Intent for a Special Needs Trust?

Generally, the person caring for a person with special needs serves as the trustee of a Special Needs Trust. However, the successor trustee manages the trust when that person dies or cannot serve. The successor trustee may not have been intimately involved in the beneficiary's day-to-day care.

A Letter of Intent is a written guide by the person's parents or caregivers for the new trustee and/or caregiver. The letter provides information that can:

• Ensure continuity of care by providing the new caregiver with key details about the person's daily routines, preferences, habits, etc.

• Provide guidance on how to use funds from a Special Needs Trust to avoid jeopardizing government benefits.

• Avoid conflicts with other family members who might want to change the person's routines.

• Details of government benefits, including strategies for maximizing and protecting benefits.

• A list of people who can provide support, including social groups, family, and friends.

• Information about the person's finances, accounts, property, etc.

• The location of important documents and contact information for professionals, including attorneys and financial planners.

• Provide medical details, including contact information for medical providers, pharmacy information, medications, etc.

• Avoid mistakes the new caregiver might make by providing them with sound advice based on the prior caregiver's years of experience caring for the person.

A Letter of Intent is not enforceable in court. It is merely a guide for a new caregiver to provide the information they need to care for someone with special needs. A Letter of Intent can make it easier for the new caregiver and avoid upsetting the person receiving care by ensuring their routine continues without change.

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