Why Not Pass Money on to Another Child?

Some parents choose to avoid the complication of a trust by leaving their estates to one or more of their healthy children, relying on them to use the funds for the benefit of their disabled siblings. This is not a solution that will protect your child because it creates great risks to the security of the funds transferred.

• What if your child with the money divorces? His or her spouse may be entitled to half of it and will likely not care for your special needs child.
• What if your child with the money dies or becomes incapacitated while your special needs child is still living? Will his or her heirs care for your special needs child as thoughtfully and completely?
• What if your child with the money loses a lawsuit and has to pay a large judgment or has other significant creditor problems? The court will certainly require your child to turn that money over to the creditor.

In addition, this can create a burden for the child or children holding these "morally obligated" funds. Can he or she spend them on herself and her family? If so, how much is belongs to each? This approach can also create rifts among the other siblings, as some may spend the funds for their own needs and some for their brother or sister.

Except in the case of a very small estate, the share of your estate going to your child with special needs should be placed in a trust for his benefit.