Estate Planning and Letter of Intent

NICHY Estate Planning Information ...

As families do their estate planning for their loved ones, they tend to think of it as a legal issue only. However, the lawyer can only establish the trust for them. Someone has to find the funds to put in it and make sure that there are sufficient funds to last the lifetime of the individual with the disability. That person is a financial planner.

The general perception of a financial planner is someone who is going to try to sell you investments and insurance through high pressure techniques. While the financial planner may very well use various financial products to fund the trust, the more reputable planners realize that most families have limited resources. Therefore, the planner's primary job is to help the family see what resources are available and then reallocate them, so that the future funding of the trust will be realistic.

As with attorneys, there are very few financial planners who have any experience with planning for the future of a person with disabilities. Most are trained to look at the overall family estate and try to provide as many dollars as possible, at the same time looking out for potential problems. When they realize that there is a person with a disability involved, they may react in a very human way, assume that the person will need extra help, and direct more dollars to the person with a disability, without understanding the consequences this might have in terms of the person's government benefits.

An experienced financial planner will examine your Letter of Intent (see the article of the Letter of Intent later in this News Digest) and do a detailed financial analysis based on the future costs of supplementary items and advocacy. He or she will then look at the many different resources available to fund the trust now and in the future. (See the Worksheet for Costing Out Expenses of the Person with the Disability, later in this News Digest, which you can use to list the total monthly expenses of the person with a disability. When you subtract the total amount of government benefits and personal income of the person from the total monthly expenses, you have identified the amount of supplementary funds needed on a monthly basis by the person with a disability.) The only other major expense will be the cost of advocacy services, which may run from $50 to $100 per hour.

Most families are surprised to learn that they do have a variety of resources within their reach that can be directed to the Special Needs Trust. The options open to a family include:

Standard government benefits. These benefits form the foundation for the future.
Savings. No matter how you look at it, the family will have to SAVE for the future. The government benefit programs have never provided enough for even poverty level existence. A regular savings program is essential to meet the person's supplementary needs in the future.

Family assistance. Family members may wish to provide residential care, supervision, and supplemental assistance in the future.

Parents' estate. Parents may leave a portion or all of their estate to the trust. To keep peace in a large family, parents should leave something for the other children as well.

Inheritances. Relatives or friends who have expressed an interest in the person with the disability should be given instructions and assistance on how to leave a gift to the trust.

Property. Some families want their loved one to live in the same house. The house can be placed in the trust and managed by a local nonprofit agency for the benefit of the person, or expanded into a group home setting.

Investments. Certificates of Deposit, IRAs, KEOGHs, and so on can be directed to the trust.
Military benefits. Some families have elected a Survivor Benefit Option (SBO), so the person with the disability will always have some income and medical care. They may still want a special needs trust to manage the other resources which will supplement the military benefits.

Insurance. For the average family, life insurance may be the only way that they can leave a large lump sum for the future by making small monthly payments. It is also one of the few guaranteed methods of funding a trust. While the above items may fizzle out as people change their minds or the economy falters, a paid-up life insurance policy in an irrevocable trust will guarantee future funds.

Other resources.

Many families have resources that are unique to them. The financial planner will help you determine which ones are appropriate for funding the trust.

As families examine ways to fund the trust, they need to keep in mind something very important. Do not forget the other brothers and sisters. While the siblings may be pillars of love and understanding when it comes to their brother or sister with a disability, they have probably seen a great deal of your time and energy spent in the disability arena. They should not be left out at the end.

Families tend to assume that, while they must pay for the services of a bank trustee and a guardian/advocate, relatives who take on these responsibilities should do so for free, because that is what families do! The trustee should be directed to pay for whatever services are necessary, whether an agency or relative performs the service. This may mean the difference between a brother driving the fifty miles to his sibling's group home once a week or once every three months.

With proper legal and financial planning, the family can guarantee that the person with the disability will enjoy a comfortable lifestyle after the parents are gone.


Letter of Intent
What is the Letter of Intent?

Simply put, the Letter of Intent is a document written by you (the parents or guardians) or other family members that describes your son or daughter's history, his or her current status, and what you hope for him or her in the future. You would be wise to write this letter today and add to it as the years go by, updating it when information about your son or daughter changes. To the maximum extent possible, it is also a good idea to involve your child in the writing of this Letter, so that the Letter truly "presents" and represents your child. The Letter is then ready at any moment to be used by all the individuals who will be involved in caring for your son or daughter, should you become ill or disabled yourself, or when you should pass away.
Even though the Letter of Intent is not a legal document, the courts and others can rely upon the Letter for guidance in understanding your son or daughter and the wishes of you, the parents. In this way, you can continue to "speak out" on behalf of your son or daughter, providing insight and knowledge about his or her own best possible care.

Why is it Important to Write a Letter of Intent?

A Letter of Intent serves many purposes. First, it spells out in black and white your son or daughter's background and history and his or her present situation. It also describes your wishes, hopes, and desires for his or her future care and, where possible, describes your child's feelings about the present and desires for the future. While you are still living, the Letter can be used by your lawyers and financial planners to draft the proper legal documents (wills and/or trusts) to ensure your wishes are carried out. Once you are no longer able to take care of your son or daughter, due to death or illness -- and this is the most important reason to write a Letter of Intent -- the Letter gives your son or daughter's future caregivers some insight into how to care for him or her. It provides advice on possible alternatives for his or her care. If your child has a severe disability, caregivers will not have to waste precious time learning the most appropriate behavior or medical management techniques to use. If your child is used to doing things independently and only requires occasional assistance, the Letter can spell out exactly what is needed. The Letter of Intent can describe this very concrete information and much, much more, including valuable information about the personality of your son or daughter -- his or her likes, dislikes, talents, special problems, and strengths. Thus, the Letter is a crucial part of any life or estate plan, because it speaks both for and about the person with a disability and his or her family.

When Should Parents Write the Letter of Intent?

The answer is a simple one. Start now. Start today. Procrastination is easy, when your health is good, the future looks bright, and there are a hundred other pressing tasks to be done. But none of us can predict the future. What will happen to your son or daughter, if something happens to you? Will your relatives, friends, lawyer, or the police know where to contact your son or daughter - and will that person know enough about your loved one to know what kind of care is needed and how best to provide it?

Writing the Letter of Intent now is a way to protect your son or daughter from unnecessary chaos and turmoil when he or she must depend upon someone other than you for the care and support that is necessary. The Letter of Intent helps pave your son or daughter's transition by giving future caregivers the information about him or her that they so vitally need.

Preparing the Letter is often an emotional experience for parents and their children. You will need self-discipline and motivation to work past the many painful questions and issues that must be addressed when considering your son or daughter's future.

What Information Goes Into the Letter of Intent?

How can you summarize the life of a person you have watched grow and develop over many years? What can you say that will give insight into and perhaps touch the heart of a careprovider who must suddenly assume some measure of responsibility for your son or daughter?

Basically, the procedures for developing a Letter of Intent are fairly simple. You can write the Letter out longhand, or you can use a computer or typewriter. Don't worry about perfect spelling or grammar; your major concern is that anyone who reads the Letter in the future can understand exactly what you meant and what you would like to see happen in your son or daughter's life. Begin by addressing the Letter to "To Whom It May Concern." In the first paragraph list the current names, addresses, and telephone numbers of the people who should be contacted if anything should happen to you (i.e., other children, case manager, your son or daughter's school principal or employer, lawyer, financial planner, priest, etc.). You might then briefly state the family history; include names, birthdates, and addresses of family members.

The Letter will then need to focus in upon seven potentially major areas of your son or daughter's past, present, and future life. Depending upon your child's needs, these areas may be: housing/residential care, education, employment, medical history and care, behavior management, social environment, and religious environment. You might begin by summarizing your son or daughter's background and present status in each of these areas. Then summarize your wishes, hopes, and desires for his or her "best" future, listing three or four options in each of these areas. Be sure to discuss your ideas with your son or daughter and to take into consideration his or her feelings on the future (more is said about this below). The worksheet shown at the end of this article is useful for this "future planning" step, which may require much thought and planning before you actually begin to write information into the Letter of Intent.

Take a brief look at the example below (marked "An Example for Writing a Letter of Intent"). This example focuses on only one of the major life areas -- Housing/Residential Care -- and illustrates how a person named Mrs. Sanders went about writing this section of her Letter of Intent for her son named Chris, a 35 year old man with developmental disabilities.

How Do I Involve My Son or Daughter in Writing the Letter?

How much you involve your son or daughter in writing the Letter of Intent will depend in large part upon his or her age and the nature and severity of the disability. It is only fitting that young adults and adult children be involved in planning their own lives to the maximum extent possible. Many individuals have disabilities that do not prevent their full or partial participation in the Letter-writing process. Before involving your child, however, you, as parents, might want to talk first among yourselves about the content of the Letter and your ideas regarding your child's future. When you've agreed upon the basic information you feel should go in the Letter, discuss each area with your son or daughter. Ask for your child's input about his or her favorite things to do, what type of education has been enjoyable and what might be pursued in the future, what type of employment he or she enjoys or envisions. Equally crucial to discuss are your child's future living arrangements:

How does your child feel about the options you are considering listing in the Letter of Intent?

It's important that your child realize that the Letter is not a binding, legal document; it is written to give guidance, not edicts, to all those involved in caregiving in the future. If you fear that your child will be upset by talking about a future that does not involve you as parents, then you may wish to make the discussion simply about the future -- what will happen when your child leaves high school or a postsecondary training program, what your child wants to be or do in the next ten years, where he or she wants to live. You may be surprised to find that discussing the future actually relieves your child. He or she may very well be worrying about what will happen when you are no longer there to provide whatever assistance is needed.

Involving your child in discussing and making decisions about the future may be more difficult if the individual has a disability that severely limits his or her ability to communicate or to judge between a variety of options. You, as parents, are probably the best judges of how much -- and how -- you can involve a son or daughter with a severe cognitive disability. For these children, the Letter is especially critical; it will serve to communicate the vital information about themselves that they cannot.

An Example For Writing a Letter of Intent

Titling a section of her Letter "Housing/Residential Care," Mrs. Sanders writes that Chris has always lived at home and had a room to himself. She briefly describes the family home and the articles in the home that give Chris special pleasure, such as his portable radio.

She then describes his daily and weekly routine, including the fact that Chris finds great joy in going to dances each week at the local Arc. She briefly lists his favorite clothing, food, games, and so on. She also mentions that each year Chris visits his sister for a week in the summer.

Mrs. Sanders then considers what future living arrangements might be suitable for Chris, and she uses the worksheet at the end of this article ("Letter of Intent Worksheet") to jot down three options. Before she transfers these options from the worksheet to her Letter of Intent, she discusses each one with Chris. She does so because he needs to be a key member of the team planning his future life.

Following her talk with Chris, Mrs. Sanders lists the agreed upon information in her Letter of Intent. The first option she lists is the possibility that Chris might live with his sister. As a second possibility, he might live with an old family friend. The third option is residence in a group home. Because this last option may indeed be the one that is finally selected for Chris, Mrs. Sanders takes care to describe the type of group home she thinks he would enjoy. As a mother and lifelong friend to Chris, she sees past his limitations to his strengths, and she notes these down in some detail. Lastly, she expresses her desire that the group home will give him room to grow and build upon those strengths.

"Residential Care" is just one important area for Mrs. Sanders to cover in her Letter of Intent. It takes her a week to complete the other sections. She finds that describing the past is not nearly as difficult as considering the future, but she methodically and systematically works her way through each area, using the worksheet when planning is necessary. The end result is a Letter of Intent that is twelve pages long, handwritten. She feels comfortable that anyone picking up this Letter of Intent will have a head start in getting to know and care for Chris.

What Happens Once the Letter of Intent Is Written?

Once you've written the Letter of Intent about your son or daughter, the first, most important thing to do is to let people know that there is a Letter of Intent available to be consulted. This might mean telling your other children (or relatives, neighbors, friends, workshop director, pastor, or case manager) why you have written the Letter, what type of information it contains, and where the Letter can be found. Put the Letter in an easily accessible place, and make it clearly identifiable. Many parents also make copies of the Letter and give it to their other children (or persons such as a neighbor).

Secondly, you should update the Letter on a regular basis. Select one day out of each year (such as the last day of school or perhaps your son or daughter's birthday) where you will review what you have written and add any new information of importance. Talk with your child each time and incorporate his or her ideas. After each addition, sign and date the Letter. Should something change in your son or daughter's life, such as his or her caseworker or the medication he or she is taking, update the Letter immediately.

In Conclusion...

Will your Letter of Intent overcome all of the obstacles to your son or daughter's transition into someone else's care? No, of course not. However, the Letter is of immediate usefulness in coping with your son or daughter's changed situation and, in the long term, will certainly help careproviders understand and care for your loved one.

Letter Of Intent Worksheet:

Considering Your Son Or Daughter'S Future

For each applicable area below, consider your son or daughter's future. List 3-4 options to guide future caregivers in decision making and interaction with your child. Draw upon what you know about your son or daughter, through observation and through discussion with your child, and share what you've learned!

Residence: If something should happen to you tomorrow, where will your son or daughter live?
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Education: You have a lifelong perspective of your son or daughter's capabilities. Share it!
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Employment: What has your son or daughter enjoyed? Consider his or her goals, aspirations, limitations, etc.
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Medical Care: What has and has not worked with your son or daughter? What should future caregivers know?
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Behavior Management: What consistent approach has worked best in your absence during difficult transition periods in your son or daughter's life?
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Social: What activities make life meaningful for your son or daughter?
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Religious: Is there a special church or synagogue or person your son or daughter prefers for fellowship?
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Additional Considerations

Advocate/Guardian:Who will look after, fight for, and be a friend to your son or daughter?
(List 3-4 options.)

Trustee(s):Who do you trust to manage your son or daughter's supplementary funds?
(List 3-4 options.)