A will with a trust for specific needs.
How can people with special needs be guaranteed a stable life after their parents' passing away?
By Igal Mor, Adv. & Notary
Accuracy in Legal Advice. Excellence in legal support.
"States that are parties (to the convention) will recognize that people with disabilities have legal status equal to that of others, in all aspects of life"
#. 12 of the Convention on the Rights of Persons with Disabilities
2006 Convention on the Rights of Persons with Disabilities
How will your special needs child or children be cared for after your death?
It is common for many people to be afraid of dealing with death and the question of what will be left behind when they pass away. However, there are quite a few people who wish to determine in advance their will and the inheritance they will leave to their children. Especially when it comes to children with special needs who require ongoing support.
In order to ensure their children’s stability and continued security, these parents require detailed information in order to prepare an accurate will, which leaves no room for error.
The use of wills with trusts as a legal solution for people with special needs
Among the options available to these parents is the creation of a “special needs trust”. A trust is an effective method of protecting the funds of those with disabilities following the death of their parents or other legal guardians.
“There are concerns regarding the financial conduct of those with special needs who inherit a large sum of money” Attorney Igal Mor, owner and partner of Mor & Co. in Jerusalem, explains.
There are several reasons for this, including the fear that the funds will not be protected and someone else could gain access to them, perhaps even the government. People with special needs are concerned that they may not be able to enjoy the money that they will inherit, which is why a trust for special needs falls under the category of estate planning.”
"Some concerns have been raised regarding the financial conduct of individuals with special needs who inherit money"
As a civil law firm, Mor & Co. provides legal advice and support, including real estate planning and construction laws, family law, inheritance and guardianship Include Estate Planning, consulting for family businesses and intergenerational transfers, handling negotiations and claimsatn all levels of Israeli courts.
As a law firm with extensive legal experience, our professionals have provided legal assistance to thousands of people during their most critical times. As a result of the difficult and complex times in which we find ourselves, this is carried out in many areas of law in order to ensure that our clients receive the best advice possible.
According to Attorney Mor and his colleagues, the choice to deal with trust for special needs stems from the idea that it is necessary to protect a population of relatively weak individuals in society with great sensitivity and professionalism. ” It is important to emphasize that there are countless types of disabilities and special needs,” explains Attorney Erez Sapir, “If a child is addicted to drugs, they are also considered special needs families, and there is concern that he will lose his inheritance if he inherits part of the estate. “There are therefore times when the heir, as well as the inherited capital, must be protected from destructive actions by the heir himself.”
How does a special needs trust work?
“Trusts for special needs are legal entities established pursuant to agreements or wills.
In addition to owning and managing property for a person with special needs, the trust also provides for the person’s various and changing needs that cannot be met by another entity,” explains Attorney Mor.
In addition, he statesIn a trust, two roles are necessary: those of the beneficiary, who is the person for whom the trust was established, and those of the trustee, who is entrusted with the management of the trust assets.” As a matter of principle, it is important to emphasize that assets are owned by the trust, not by the trustee or beneficiary.”
In relation to a special needs trust, what questions should be asked?
“The questions are many and varied: what is the functional level of the person with the special needs; what will his future needs be; what is expected to be the mass of the trust assets; who will manage the trust assets; how can the trustee’s loyalty to the beneficiary be guaranteed and how long is the trust expected to exist.?” .
Attorney Mor points out, for example, that in the case of a person with special needs who lives in a community apartment operated through a bid by the Ministry of Social Affairs, whose parents left behind a residence worth three million shekels and who has two other siblings – he is expected to inherit about one million shekels after his parents’ death. The question that arises in this case is whether the state or another entity is permitted to use the funds inherited by the disabled individual?”
“The social and economic issues at the micro and macro level are profound,” continues Attorney Mor,
“”And they include the questions of whether it is right for the family members to sell the residential apartment after the death of their parents; whether it is right to appoint a guardian for that heir; perhaps to appoint a decision-making supporter for him; what does it mean that that person will inherit money or property; is that person expected to have children and will he marry in the future; Will the property he inherits be protected? Is it possible that an outside party will manipulate that person and take his property and how will it be possible to make sure that the ‘blessing’ of receiving property does not become a burden that prevents that person from receiving the services he would have received if he did not have the funds?”.
In this regard, Attorney Mor points out that parents face many difficulties and dilemmas. Parents often express their concern and upset through sharing, he says.
and ask for solutions that will ensure that their children’s lives are stable and safe, with the same standard of living as they are used to. For these parents, the most effective solution is to establish a special needs trust which works to address exactly these issues.
What can be done to protect children?
“We identify three main scenarios for parents of children with special needs,” adds Attorney Mor, It is assumed that the parents do not leave a will, so the choice of law is an equal distribution among the heirs. One family member generally serves as the guardian of the person with special needs and reports to the general guardian about their condition. This is a report that outlines what the living requirements of the person for whom a guardian is appointed are and how the funds are managed. External supervision is an essential element.”
In addition, it is possible that the parents made a ‘regular will’ with an equal distribution of assets and did not take into account the child with special needs. The result of such a will is typically the same as if no will had been made. There is also a third option, which we like less: A will that includes an exclusion clauseThis means that a child with special needs is not expected to inherit and is not included in the inheritance. In spite of this, the siblings make an oral commitment to the parents that they will take care of the sibling with special needs. The third type of will provides an opportunity for manipulation, since the excluded child’s share is not guaranteed. In addition, he is not even exposed to foreclosure by a third party.
Because of this, Attorney Mor points out that “This solution is rejected by his office, even if the brothers agree to commit, there is no guarantee that their sons or spouses will agree to continue managing the brother’s affairs in the future, and it cannot be guaranteed that the funds will not be used for purposes other than those of the special needs child.”
The most appropriate legal mechanism is therefore a trust for special needs, which guarantees and sometimes even improves the quality of life of a child with special needs after the death of his parents.
Attorney Mor explains that a trust for special needs can be used in many situations involving people with medical problems, including mental illness. There is a major disadvantage to leaving a person with a substantial amount of money if he is unable to manage his affairs on his own. This is due to the fact that private parties will be able to manipulate him and exploit his weaknesses. It includes several laws on behalf of the state that require that person, when they have money, to bear the cost of various things. The immediate payment of that person’s disability allowance, for example. Right hand gives, left hand takes. As a general rule, a special needs trust protects the individual with special needs.”
What is the actual process of establishing trust?
“It is essential that we meet with parents in depth in order to get to know the entire family unit. This will enable us to understand their lifestyles and expectations, as well as what is expected in the next few years. What exactly is the disability and what is the average lifestyle that exists in the medical literature for that disability? We listen carefully to parents’ aspirations, which is an extremely intimate conversation. We explain to parents that this is one of a variety of legal tools designed to safeguard a child’s capital and quality of life. The best solution is sometimes to establish the Special Needs trust while the parents are still alive.”
In addition, he statesThere are families where the money is liquid, and there are families with an apartment or apartments that can be sold when the time comes, and there are also situations where the recommendation would be to allocate, for example, the rent of an apartment to cover the beneficiary’s expenses. Therefore, following a lengthy meeting and sometimes more than one meeting, the firm’s staff formulates a draft will or trust agreement, and, when necessary, a trust protector is appointed. It is not uncommon for us to meet with the brothers or sisters for an explanation meeting in which we explain to them what is expected of them in the future as trustees for the brother, what the position entails, and what the required tax reports are.” He adds, It is important to have a process and dialogue with the parents, which raises questions, desires, and problems specific to a particular family situation, and we provide solutions to those problems.”
A will that is drawn up incorrectly can have devastating consequences for a family and cause disputes without providing a resolution. Expertise and familiarity with many areas of the law are required when drafting a will with a trust for special needs. This includes the preparation of Wills, the establishment of trusts, real estate taxation, family law, and the preparation of financial agreements, among other services. There are also matters of intergenerational transfer and family businesses in some families. Parents may wish to obtain a financial balance after their death due to funds they gave to their children while they were still alive, for example to purchase an apartment, and the situation must be formulated very clearly.”
There is a solution for every family
Creating a special needs trust can ensure that the heir, a person with special needs, can benefit from the money that his parents leave for the purpose of financing his specific needs without anyone interfering with their finances.
“In the field of planning and protecting the family capital there is a wide variety of solutions “
The trust is composed of four elements: the creators, the trustee, the beneficiaries for whose benefit it was created, and sometimes also the protector who performs the ultimate monitoring. There are often questions regarding the amount of money necessary to establish a trust or which assets should be allocated to the trust after our death.”, according to Attorney Sapir, A wide range of assets can be transferred to trusts, ranging from real estate to stock portfolios, cash, pensions, various insurances, and more. Any significant asset that is liquid can be transferred to a trust. How much money do beneficiaries require? The answer to this question varies from person to person.”.
Are there any special needs that the trust is permitted to purchase for the beneficiary?
Sapir, Attorney: “We have prepared a list of dozens of products and services that parents would like to purchase for their children. The wording in the trust includes an open list, provided that it is not a service or product that can be given to a beneficiary free of charge because of his entitlement, or a service or product that would deny him access to services or products he otherwise would have been entitled to.“
How long does the trust last?
“There are three main situations in which it is possible that if the beneficiary dies, the trust assets will be inherited in accordance with the trust’s terms. It is common for parents (the ones who create the trust) to determine that property will be transferred from the trust to their siblings. The trust may also become ineffective once all of its assets have been exhausted – in which case it would be appropriate to continue the trust. A third option is in cases where it is determined that the beneficiary is no longer in a situation where he needs the trust, for example, if the medical condition for which it was established ceases to exist, such as in a situation where there is a son who is addicted to drugs, and parents determine that as long as the son proves that he has weaned himself from drugs for a period of time to be determined and provides references for this, then as part of the rehabilitative approach, the son will receive control and continue to manage the property.”
What is the process for selecting a trustee?
In most cases, parents choose a family member from the first or second degree whose judgment can be trusted and who can be ensured of his loyalty. Quite literally. Often, more than one trustee is appointed, and in some instances, all siblings are chosen by the parents. Depending on the circumstances. In regard to the salary, some families assert that, in order to maintain the normal lifestyle of the brothers, a salary should be paid to the brothers who will serve as trustees.”
It is clear that there are a variety of solutions available in the field of planning and protecting the family capital.” concludes Attorney Mor,
A trust for special needs is one of them. Agreements may be drafted with property protection – a type of cautionary note. You may add a partner to the account, limit credit card use in various ways. To put it another way, trust is not the only solution, but a legal tool that complements other solutions.”
We invite parents, relatives, and friends of a person with special needs to consult with us regarding an adapted and effective legal solution
Mor & Co.’s family law department has extensive experience in this area of law. As part of our daily practice, we represent and litigate in courts on a variety of matters, including family cases, guardianships, wills, and complex inheritances.
As a law firm with experience dealing with wills with a trust for special needs, we undertake to do our best and make our extensive experience available to our clients.
For legal advice regarding matters related to a special needs trust,
Please feel free to contact us at 02-595-3322
You may also reach us via WhatsApp at 050-441-1343
It is our specialty to draft trusts for individuals with special needs.
A will that provides for a legal and orderly mechanism to protect a child(ren) who may need assistance throughout their lives.
