Special Needs Planning

Question:  I have three children and one is an incapacitated adult child. I would like to prepare a will that leaves my house to the three children but puts one-third of the house in a special needs trust to benefit my child with disabilities. Is this even possible? I believe a house (and other assets) can be left to an irrevocable third-party special needs trust, but can the house be left to the trust as one-third owner with two other siblings? Thank you.

Answer:  Yes, the house can be left one-third to the special needs trust and one-third to each of your other children. Just be aware that if your children keep the house, then when either of the children with a one-third interest dies, his or her share will go to his or her estate. If that child has a will, it will pass as the will says. Without a will it will go to the child’s nearest relatives, which may be a spouse and children. Lots of potential owners can complicate things. You may want to have the house go to a trust that says that on its sale the proceeds get divided three ways as dictated by the trust. Of course, this could all be academic if you expect your children to sell the house when you no longer need it.

For more information about special needs trusts, click here.

© 2015 MATTHEW L. MERCER | Attorney at Law

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