The Benefits Of Life Insurance
If that trust is established during life, it can be the beneficiary to anything that has a beneficiary designation, including life insurance. Now I’m going to get into my commercial for life insurance. Life insurance pays directly to the beneficiary, it does not go through probate, it does not go through being exposed to the creditors of your estate. It is possible that creditors of your estate can get to that life insurance, but it is very difficult and often times it’s just not worth it to them to go through the expense of trying to recover from a life insurance policy that pays directly to the beneficiary. You can name a special needs trust as a beneficiary to life insurance. From the date of death, it takes about two to three days to get a death certificate; it takes another two to three days to file a claim form with the life insurance company. Within ten days there is usually money in the special needs trust ready to meet the needs of your special needs child. Probate can than take as long as it needs to take, if it takes nine months, if it takes a year, so what, we’ve got the resources to take care of the child right away. That is valuable, that’s why many times a special needs trust, I would say ninety, maybe even more than ninety percent of special needs trusts I create, one of the primary funding mechanisms is a life insurance policy. Sometimes it’s a second to die policy, sometimes it’s a whole life policy, sometimes it’s a whole life policy, all those, whether it’s right for you, that s a great discussion to have with someone who does financial planning for special needs families. How are you going to pay for it all? One of the biggest questions I hear all the time is “how much money do I need to set aside for a special needs trust? That’s all a factor of “how mush does it cost to meet your child’s needs over and above what the government benefits are. If your child is in elementary school, those needs are going to be different than when they are in their twenties, when they are in their thirties. Working with a financial advisor who understands all those issues helps is focus in on how much we need to set aside. Very rare do I see a special needs trust that’s over-funded, but every now and than I do run across one where they left four million dollars and now all the other kids are getting nothing. I understand that you want to make sure your special needs child is taken care of, but maybe they don’t need 4 million dollars. Maybe two million will cover the child’s needs, split the rest there and when this child no longer needs it, we’ll split the rest among the kids. That’s discussion that’s something I’m not really good at, that’s a discussion for a financial advisor who can help with your retirement planning, your long term care needs. Another issue that we have not even addressed here is how are your resources going to be used to take care of you also. Some people would like to retire at some point, some people are going to have to retire at some point, either because of disability or some other need that they won’t be able to continue working, how are you going to meet your own needs? Again, that’s a question for a financial advisor, there are some folks in the city that focus on that.
Nadler Biernath LLC assists clients in the Atlanta, Georgia area and throughout Georgia including Kennesaw, Alpharetta, Roswell, Marietta, Buckhead, Johns Creek, Duluth, East Cobb and Dunwoody.