MPParticipantStatus: PhysicianPosts: 31Joined: 04/24/2016
What would you do if you had one and only sibling who needed a special needs trust but one of your parents refuses to talk about it?April 17, 2018 at 8:49 am MST #118134jfoxcpacfpModeratorStatus: Financial Advisor, Accountant, Small Business OwnerPosts: 7307Joined: 01/09/2016
It can be very difficult to get us to face our own mortality – perhaps it’s easier for doctors. I guess you need to decide first how much responsibility you want to take. Ultimately, you’re probably going to be involved; do you have the funds to set up a trust yourself and is that your goal? Do your parents not have the ability to fund one? Will the parent who is willing to discuss set up the trust without the consent of the other? A lot we don’t know here.
Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
https://fox-cpas.com/for-doctors-only/April 17, 2018 at 11:03 am MST #118150MPParticipantStatus: PhysicianPosts: 31Joined: 04/24/2016
In a way I wish they had nothing. They have means and the ability to set up a trust fund/special needs–even if they told me “we have decided to give more to the sibling because of their limitations” I would be OK with that—what I am not OK is that my mother is unwilling to talk about anything.April 17, 2018 at 1:10 pm MST #118221CraigyParticipantStatus: SpousePosts: 1858Joined: 09/16/2016
Are they providing for your sibling’s needs right now?
Some people simply don’t like to discuss their estate plan (or lack thereof). Not much you can do.
LEVEL 1 WCI FORUM MEMBER.April 17, 2018 at 1:32 pm MST #118232artemisParticipantStatus: PhysicianPosts: 470Joined: 12/02/2016
I’d try to broach the subject indirectly, by talking to the balky parent about what will likely happen to the special needs sibling once both parents are gone. Is your mother simply assuming YOU will be the one to manage your special needs sibling’s finances? Maybe she needs to know that from a legal standpoint special needs sibling is on his/her own if nothing has been set up prior to both parents dying.April 17, 2018 at 1:32 pm MST #118233spiritriderParticipantStatus: Small Business OwnerPosts: 1702Joined: 02/01/2016
One starter option to consider if the sibling was permanently disabled <26 is an ABLE 529 account. This account allows contributions from others combined up to the gift tax annual exclusion limit (2018 = $15K). The beneficiary can contribute the greater of the previous year’s one person FPL or the beneficiary’s previous year’s compensation. The maximum balance to avoid interference with government entitlements is $100K.
This is ideally not a replacement for a special needs trust. It allows tax-free gains and distributions for a far wider variety of qualified disability expenses. The contribution limits and maximum balance limit its application. However, it is a good way to get started with a modest amount of dollars.AnneParticipantStatus: PhysicianPosts: 886Joined: 11/07/2017
In a way I wish they had nothing. They have means and the ability to set up a trust fund/special needs–even if they told me “we have decided to give more to the sibling because of their limitations” I would be OK with that—what I am not OK is that my mother is unwilling to talk about anything.Click to expand…
I don’t know anything about special needs trusts, but I have experience with having a mother who has a very difficult time talking about difficult/unpleasant issues, esp those that involve both finances and end of life topics. You can’t change how your mother sees things or interacts, but you can affect your side of the equation. First, I would clarify why you care about this issue: are you worried about taking on responsibility for your sibling after your parents pass? Do you think your parents are not doing what they should to take care of the sibling? Do you want to know what to expect if/when they pass? Then, clarify with yourself what you are and are not willing to do to take care of your sibling.
Then let your mom know how the situation affects you emotionally (guilt, fear, anger). Acknowledge that she has no obligation to you to discuss her plans with you if she doesn’t want to and that your feelings aren’t her fault. Let her know what your boundaries are in terms of what you are willing to do for your sibling after your parents are gone. Let her know how you think her decision to take action or not now may affect your life and your sibling’s life in the future. Let her know that you know of some resources of how to set up a trust for your sibling (assuming you do). And then the rest is up to your parents.
I have found Harriet Lerner’s books to be helpful for these conversations. And if having a conversation is impossible, you can always write a letter.artemisParticipantStatus: PhysicianPosts: 470Joined: 12/02/2016
^^^What a wonderful post, Anne!
One complicating factor is that the OP may not be able to take care of the sibling in question even if he wants to. Right now the money in question belongs to the parents, who are free to do with it as they wish. If they choose to put it in a trust, so be it. Their’s nothing their heirs can do about it. But unless they act while they still can, upon their deaths Disabled Sibling’s share of the estate is HIS, to do with as HE pleases. And the OP can’t just swoop in and take control of another adult’s money. He’ll have to prove in court that Disabled Sibling is too cognitively impaired to manage money – and depending on how obvious and severe the disability is, that may be very difficult to do.
That’s an angle I would suggest stressing when talking to Mom. This is about protecting Disabled Sibling. Get the parental protective instincts aroused, and she may be more cooperative.preetishahParticipantStatus: Financial Advisor, Small Business OwnerPosts: 24Joined: 04/10/2018
MP – I’ve had prospects approach me who wanted to gift a financial plan to their child or sibling – in the same way, maybe you can gift a few sessions with an estate planning lawyer who will tell them more about Special Needs Trusts. I think a lawyer will be more useful than a planner if you want them to have specific help setting up a Trust, although if they are not even considering a Trust of any kind, then they might not appreciate a session with a lawyer. Or they might have already met with someone and they are just not sharing that info with you.
This is a tough one, it happens all the time with parents, nothing else one can do after some point. Maybe send them subtle hints like relevant articles or books until they crack and given in! 🙂
I used to do that with clients who didn’t take the Estate Planning seriously, I’d point them to James Gandolfini from the Sopranos and his $30 million Estate Planning mistake: https://www.aol.com/article/finance/2013/07/08/james-gandolfini-will-estate-tax/20651370/
Preeti Shah CPA, CFP®
[email protected]┃201-892-6094April 17, 2018 at 6:47 pm MST #118322MPMDParticipantStatus: PhysicianPosts: 2097Joined: 05/01/2017
I’ve always thought that the ability of the child to push in situations like this is directly proportional to the eventual responsibility that will be expected of said child.
If your parents don’t want to talk to you abut their estate and they have 3 kids who are all doing fine, well that’s kind of their deal.
If your parents expect you to care for a special needs sibling after they die but won’t discuss planning options with you, I personally would escalate pretty aggressively in that scenario potentially well past the point of comfort. It’s not the kind of thing you want to wing it on.StarTrekDocParticipantStatus: PhysicianPosts: 1716Joined: 01/15/2017
What’s the root cause of your mom refusing to set it up? SNT primary reason to have is to get the beneficiary ‘poor’ and qualify for assistance that he/she may not be able to get. If third party SNT, it’s protected from clawbacks from the State. I believe ABLE accounts along with first party SNT don’t have that protection.
It maybe that your mom doesn’t trust anyone or doesn’t understand the reasons for a SNT and simply wants you or the estate to administer inheritances directly.
I believe the best solution would be to arrange an estate planner/advisor to your parents. Particularly one that has SNT experience (but not solely as they will meet the planner with a fair amount of scepticism if she’s really that opposed to SNT).
Perhaps it maybe she is afraid of one’s mortality. We hated doing our Living trust docs.
Get to the root cause and address that to move forward.April 17, 2018 at 10:57 pm MST #118386