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Guardianship and Financial Planning
General information for all families

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Contents

Guardianship

Establishing guardianship and/or conservatorship may be appropriate for your son or daughter if he or she is unable to manage his/her own life independently as an adult. Once your child turns 18, you cannot legally make decisions for him or her. This means he or she can enter into contracts, be held accountable for expenses, get married as well as many other things. A guardian protects someone from harm or neglect, and makes decisions about finances, health and property. Only a court may decide if an individual is incapacitated and appoint a guardian. The court will look at evaluations from physicians, psychologists and others to make that determination. While guardianship provides important protection, it is also very restrictive in that it removes most of an individual’s legal rights to manage his/her own life.

What are the responsibilities of a guardian and what are the types?

A good guardian will take into account the needs and desires of the individual when making decisions about residence, medical treatments, and other important matters. The courts will only remove those rights that the proposed individual is incapable of handling.


Alternatives to Guardianship

There are a number of alternatives to Guardianship that may be appropriate depending upon the needs of your son or daughter. These alternatives are much more easily revoked. These alternatives work best for high functioning adults, allowing parents to give support where needed. Also, if you choose to go this route, check with your child’s medical practitioners to see what they will accept for major surgeries.

Durable powers of attorney for property or healthcare:

With a Power of Attorney (POA) an individual with autism (the Principal) may appoint another person (the Agent) to act on his or her behalf under the terms of the Power of Attorney agreement. A Power of Attorney will vary depending upon the needs of the individual. A Financial Power of Attorney might allow the Agent to do banking, pay bills and attend to other financial matters; while a Health Care Power of Attorney would allow the Agent to access medical information and make medical decisions on behalf of the Principal. Unlike Guardianship, a Power of Attorney does not require a court proceeding nor annual reports to the court and is therefore much simpler and less expensive a solution to assist your child with his or her affairs once reaching the age of majority. The Principal will need to have a general understanding that the Power of Attorney allows the Agent to act on his or her behalf and respond to questions posed by your attorney.


Other options for handling property, estates, and medical issues include:

  • Representatives or substitute payees
  • Health care proxy
  • Trusts.
  • Living wills.
  • Community advocacy systems.
  • Joint checking accounts.
  • Community agencies/services.

Special Needs Trust

In most states, if an individual has or inherits more than $2,000 in assets, excluding a car or home, he or she loses eligibility for government benefits, such as Medical Assistance and Supplemental Security Income (SSI). This could be devastating to an individual with special needs. With the use of a device called a "special needs trust" you can protect government benefits and also fund expenses not covered by these programs such as education, travel expenses, repairs and upkeep on a residence. Anyone can set up a special needs trust with their own funds; it does not have to be a family member.

While it is important to establish the trust during your lifetime, many parents and other relatives prefer to fund them through their estates. The reason is that there are tax advantages with estate planning. To meet current expenses, a parent or family member might consider providing assistance in other ways during their lifetime, such as making tax-free gifts on behalf of a special needs person by paying bills to meet their needs. Current tax regulations allow up to $13,000 per donee per year for these expenses. It is important to hire an attorney in the state where the individual with special needs resides, who is familiar with this vehicle. The state and county bar associations, local ARCs (Associations for Retarded Citizens), and word-of-mouth networking with parents of individuals with special needs are among the best ways to identify who has experience in this area.

See also: MetLife's Supplemental or Special Needs Planning, which includes an excellent discussion of Special Needs Trusts.

Setting Up A Special Needs Trust

A common obstacle for many families in setting up a trust is the relatively high minimum investments required by a bank trust department or other financial organization. To address this concern, many ARCs have found a way to pool and manage trust assets, provide accounting and tax reporting, serve as trustee, as well as other services. Some ARCs allow a special needs trust to be established with as little as a few thousand dollars.


Resources

Guardianship and Financial Planning Resources
Guardianship and Financial Planning Providers