What to Do When Your Child Turns Eighteen
By Bernard A. Krooks, Certified Elder Law Attorney
You could write an entire book (many already have) on what you should do when your child turns eighteen. Your child has now reached the age of majority and along with that comes all the privileges and responsibilities appurtenant thereto. In fact, the law presumes that when you achieve your eighteenth birthday that you are capable of making your own financial and health care decisions. This means parents no longer have authority to make those decisions on behalf of their child or even be involved in the decisions without the child’s (now adult) consent. What happens, though, if your child who is about to turn eighteen has disabilities and may not be able to make their own decisions?
First and foremost, just because an individual has a disability does not mean that they are not capable of making their own decisions. In fact, there is a strong preference in the law to allow individuals with disabilities to make their own decisions with the least amount of court intervention. If the individual has sufficient capacity to execute a durable power of attorney and a health care proxy, that usually is the recommended course of action. Moreover, a recently enacted Supported Decision-Making law in New York promotes self-determination and inclusion for individuals with intellectual and developmental disabilities and allows them to make their own decisions with the support of trusted persons in their lives. Supported decision making is widely recognized as an alternative to guardianship. In order to obtain guardianship, a court proceeding must be instituted. This can be time consuming and expensive, depending on the family circumstances. If the court determines that a guardian is necessary, then the guardian will have the power to make certain decisions on behalf of the individual, instead of the individual making those decisions themselves. Guardianship is a last resort.
Turning age 18 means that your child may now be eligible for Supplemental Security Income (SSI). SSI is a means-tested federal benefit program that provides a monthly income amount to individuals who qualify. To qualify, the individual must be disabled and have less than $2,000 in resources. Prior to turning age 18, the parents’ assets are deemed to be available to the child for purposes of the $2,000 resource test. Thus, it is extremely difficult for most children under age 18 to qualify for SSI since their parents’ resources are attributable to them. However, once the child turns eighteen, the parents’ assets are no longer deemed available to the child and SSI benefits can be obtained.
Providing long-term financial security for your child with disabilities can be a daunting task. What if something were to happen to you tomorrow, who would care for your child and how would you pay? Many clients address this concern by purchasing life insurance. If the parents are young, this can be an affordable option. The older you get, the more expensive it is to buy life insurance. You also need to think about who the beneficiary of your life insurance and other assets should be. If your child with disabilities is not able to manage their own financial affairs or is on a government benefit program like SSI that is means-tested, then leaving money to them outright can be a big mistake. The money left to them will disqualify them from SSI if it is more than $2,000. Best to create a supplemental needs trust for their benefit. This way, the money will not count as a resource for SSI and the trustee of the trust can hold and invest the money for your child’s benefit. Another option for individuals who have a disability but are able to manage their own money is an ABLE account. These accounts offer tax-free growth and the amounts in ABLE accounts do not count as resources for SSI and other means-tested government benefit programs.
You can find an attorney who can assist you in this process by going to www.specialneedsalliance.org.
Bernard A. Krooks, Esq., is a founding partner of Littman Krooks LLP. He was named 2021 “Lawyer of the Year” by Best Lawyers in America® for excellence in Elder Law and has been honored as one of the “Best Lawyers” in America since 2008. He was elected to the Estate Planning Hall of Fame by the National Association of Estate Planners & Councils (NAEPC). Krooks is past Chair of the Elder Law Committee of the American College of Trust and Estate Counsel (ACTEC). (914-684-2100) www.elderlawnewyork.com.