Vulnerable Beneficiaries Could Benefit From a Letter of Intent
Some years ago, when a Missouri elder law attorney, Reginald Turnbull, presented on Letters of Intent to the National Academy of Elder Law Attorneys, he gave me reason to think “what a great idea for supplemental needs trusts for disabled children.” Later I thought, this idea can be expanded to include minor children who are not disabled and even frail and elderly parents who are beneficiaries in a Will.
A Letter of Intent is, in its simplest form, a statement or letter from someone writing a Will or a Trust indicating how he or she wants the funds to be spent. It can go further than this and can be as limited or as expansive as you wish.
Wills and Trusts may not provide enough information for your Executor or Trustee when dealing with minor or disabled children or frail and elderly beneficiaries.
Here are some examples.
If you are the parent of a severely disabled child, you might want to provide contact information for all the agencies you deal with to receive services. You might state what kind of living arrangements you want your child to have on reaching majority – whether to buy a home in his name or to encourage a group living arrangement. You might name “backup” decision makers. You can even furnish personal information such as preferences in hobbies and music. You could tell your Trustee that you encourage funds to be spent on travel and on socializing with friends and family members.
You may want to suggest to the person who might be raising your child or caring for your parent, the kinds of things that he or she can or cannot use the trust funds to accomplish.
If the trust is a supplemental needs trust and is intended to supplement and not to replace government benefits then the letter of intent needs to be consistent with the trust and needs to have the language of the trust in mind.
With a letter of intent, you could include Individualized Education Plans (IEP’s) from school, medical background and observations on your child’s or your parent’s needs. You can include information on doctors, medications, medical records and surgeries, the person’s wishes and fears, routines and religious preferences.
Estate planning has typically been a matter of designating where money and property is to go after the owner’s death. Really, though, the person making his Will or establishing his Trust would like to know more in many cases. He or she would want to assure that the funds will be used properly after his or her death and that the people they care about, especially those who are children or who are disabled or vulnerable, will be properly cared for after they die. This is what a Letter of Intent is all about. It tells the Trustee and, if there is a Guardian, then also the Guardian, how the funds should be used and, even beyond money, what goals and needs are involved.
Letters of Intent can be used to look into the future and describe the kind of care and assistance you want your child or disabled elderly parent to receive if you were unable to provide it.
Here are some of the questions you might answer with a Letter of Intent.
- Where Should She Live. Would you want your child to continue to live in the same house where she has lived with you or somewhere else? If somewhere else, where? If in the same house, how should bills be paid? Will caretakers be needed?
- How Does She Socialize. Does your elderly and disabled parent keep to herself or would she welcome company. How much? Are there family members, friends or neighbors who would help? Must she move?
- Who Are Your Son’s Friends and Support System. Guardians and trustees may not know contact information.
- What Benefits Does He Receive and What Benefits Might He Qualify for After Your Death. Do checks coming from Social Security originate with Social Security Disability based on earnings or Supplemental Security Income (SSI) which is a needs based (welfare) program. Is your child or parent on Medicaid? Social Security benefits may be available to survivors after your death, including both parents and children, in many different situations based on a decedent’s earnings record. You should know what they are.
Keeping all of this in mind is a good start.
For more, listen to “50+ Planning Ahead” a weekly radio program on WCHE 1520 on every Wednesday from 4:30 pm to 5:00 pm with Janet Colliton, Colliton Law Assocs., PC, and Phil McFadden of Home Instead Senior Care.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.