reprinted from the pages of the
Tuesday, August 18, 2009
By Tim Grant
Pittsburgh Post-Gazette
After eagerly anticipating
the birth of their first child
seven years ago, Shawn and
Sharon Widenhofer found themselves embarking on a parental
journey they had not planned
for when they learned their
daughter, Sarah, had been born
with Down syndrome.
Initially devastated that their
hopes and dreams for her might
not come true in the way they
had imagined, they quickly
armed themselves with
information to become great
parents and effective advocates
for their little girl.
“From the beginning, we
realized we’d have to think
about the future in more specific terms as far as what would
happen to Sarah if something
happened to us,” said Mrs.
Widenhofer, 42, of Cranberry.
There are nearly 5 million
children in America with
physical, emotional or mental
impairments, according to the
U.S. Census Bureau’s 2006
Americans with Disabilities
report.
Families with disabled
children must have a plan for
who would care for their special
needs if the parents were unable
to – and also how to provide for
them in a way which would not
disqualify the child from receiving government benefits such as
Social Security and Medicaid.
The Widenhofers have
created a special-needs trust for
Sarah, 7, which is funded by
whole life insurance policies on
Shawn, 38, and Sharon. Money
from the policies, however,
would be owned by the trust to
avoid affecting Sarah’s eligibility for government assistance.
PLANNING
BRINGS PEACE
Anyone receiving Social
Security disability benefits
cannot have more than $2,000
in his own name without losing
the benefits.
“If a family member leaves
$10,000 to a child, it would
disqualify them for social programs, but it could go into the
trust,” said Mark Stallsmith,
a special care planner for
Massachusetts Mutual Life
Insurance Co. in Valencia,
Butler County.
“Not only do families need
to create the trust, they need to
communicate that to other
families members,” he said.
“They have to disinherit the
[disabled] child and make the
trust the beneficiary if they
intend to do something for
the child.”
Creating the special-needs
trust has taken a major emotional load off the Widenhofers,
knowing that Sarah’s needs will
be taken care of if they pass
away or become disabled.
“No one likes to plan for their
demise,” Mrs. Widenhofer said.
“That was the hardest part of
this. We were making plans for
not being here and deciding who
All content © 2009 Pittsburgh Post-Gazette and may not be republished without permission.
Special-needs
trusts can
provide
for disabled
children
to put trust in, making sure they
would have Sarah’s best interests at heart and act as we would
want them to.”
Their work is not done.They
have not completed another
important document to be
included in the trust known as
a “letter of intent.” It explains
in detail how to care for a particular child, including information on her personal likes and
dislikes, habits, medications,
diet, churches and what makes
her tick.
Very often children and adults
with Down syndrome, cerebral
r e p r i n t e d f r o m t h e p a g e s o f t h e P i tt s b u r g h P o s t - G a z e tt e
Rebecca Droke/Post-Gazette
The Widenhofer family, from left, Shawn; Seth, 4; Sarah, 7; and Sharon, at their Cranberry home. The Widenhofers
have created a special-needs trust for Sarah, who has Down syndrome.
palsy, brain damage and autism
are not able to communicate
their preferences to a new
caregiver.
For someone as young as
Sarah, those details are always
changing. While the person the
couple has appointed to look
after Sarah knows her personality well, the Widenhofers have
not gotten around to recording
the information on paper. They
realize Sarah’s needs at age 7
will be completely different
when she is 20.
Helen Collins, a vice president and senior trust adviser
at PNC Wealth Management,
Downtown, said the specialneeds trust was intended to
supplement any government
benefits the child is entitled to,
not replace them.
The trust is there to pay for
things to improve the quality of
a disabled child’s life that are
not typically provided by the
government, such as horseback
riding, music lessons, concert
tickets, aqua therapy, Disney
World or special camps.
“While vehicles are expensive
enough, when you add the cost
of a lift, that increases the cost,”
she said. “A family might even
need to have their home remodeled or rebuilt to accommodate a
child with special needs.
“Most homes don’t have doors
wide enough to accommodate
a wheelchair or a bathroom of
sufficient size. These are some
things trustees can help the
family assess the need for and
arrange for the payment of from
the trust.”
Too often families will leave
their assets to another family
member who has agreed to use
the money to care for the dis-
abled child. That could expose
the money to influences such
as creditors, tax liens, divorce,
lawsuits, bankruptcy or even
greed. If an able sibling were
to die first, his or her survivors
would receive the money, and
that might not serve the needs of
the disabled person.
But recent rule changes have
made the proper drafting of
these trusts more important
than ever. Several challenges to
improperly worded trusts have
caused government benefits to
be denied to trust beneficiaries.
Advisers say trustees should
make payments directly to
providers of goods and services.
The child cannot control or have
direct access to any portion of
the trust.
Special-needs trusts can be
created using money a child
already has received from a
lawsuit or inheritance, or it can
be established inside a will,
which will come into existence
when a child’s parents die. The
most popular way of funding
that type of trust is through
whole life insurance.
A major issue for parents to
consider is the life expectancy
of their disabled child. With
advances in medical care, many
children who would have in
earlier days died before their
parents are now outliving them.
“We have a lot of 80-year-old
ladies calling us with 60-yearold special-needs children,”
Mr. Stallsmith said. “Mom is
going into a nursing home and is
wondering what will happen to
that child when Mom never got
guardianship of the child.”
Mr. Stallsmith said guardianship needs to be established
when a special-needs child
reaches the age of 18; otherwise
the parent cannot get access to
medical records and make other
important decisions.
The Widenhofers, who also
have a son, Seth, 4, said the
challenge for them and others in
their special needs parent support groups has been finding
a financial adviser who really
knows the fine details of such
planning.
“I’ve been to several classes
and seminars where I knew
more than the speaker,” said
Mr. Widenhofer, a senior technical consultant for McKesson, a
health information systems
company. “There are finer points
of the law a planner should
know about.
“Getting our financial plan
together has taken a lot of
weight off our shoulders, but we
are continually reviewing the
plan we have in place as well
as new legislation that is being
passed. We are planning for the
worst and hoping for the best.”
All content © 2009 Pittsburgh Post-Gazette and may not be republished without permission.
Reprint provided courtesy of Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001. This information is not intended as specific tax or legal advice and may not be
relied on for purposes of avoiding any Federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to
seek advice from their own tax or legal counsel.
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