Plan Special Needs

Finally, on 9th March 2018, honorable Supreme Court has allowed Living Will in India. Though it may be with too many conditions but it’s a beginning which has been made. It’s a coincidence that only a few days back I had a conversation with a special needs parent on forming a special child trust. In this discussion there was mention of Living Will from legal experts. The advised was given to the parents for their special needs child future. But what inspired me to write this post is the confusion which prevailed after wards on substituting a living trust with a living will.

Living Will or Living Trust

A Living Will

We all are aware about “Last Will and Testament” or a “Will”. The objective of writing a Will is to ensure the legacy left for the loved ones can be easily bequeathed to them. This document list down the deceased wish i.e. who should get what and how much. A Will is executed on the death of the person. The major benefit of a will is that it sets family house in order which otherwise would have been a legal hassle for the loved ones.

But think of a situation where you are incapacitated to make any decisions.  In many cases the person lies in the hospital  for months or even years without any probability of recovery.   It will be a situation which will put your special needs child future in danger  if there is no provision for  his/her care. In the event of you being the guardian of the child any such eventualities will create legal hurdles.   Since you cannot take decisions then who will fit in your shoes now.  In US and many other countries a Living Will is written for these situations.

Conceptually, a Living Will is an advanced directive written primarily for physicians.  This document states the people wish for end –of-life care if they are unable to communicate their decisions.  This kind of Will is not a wish at death but actually a wish to be relieved from the pain arising from prolong medical care.  In a living will a person can instruct to remove all the artificial prolongment of life if situation is irreversible.  In most countries where living will is in practiced a durable power of attorney is written along with it. This DPOA ensure there is someone to carry out the wishes on end of life treatment that are written down in the living Will.

A Living Trust

A living trust is popular in US but less known in India. It has been used widely in succession planning by American families. In India, to some extent the living trust is used by few sections of society such as special needs children families to plan for their child’s future. A living trust has an advantage of successfully transferring your assets to the next generation while you are still alive.

Conceptually a living trust is a method of succession planning wherein the assets are transferred before one’s death to chosen legal heirs in the name of the trust created for their families. When assets are transferred to the trust before death then they are in control of the trust.  Once the trust is created during the lifetime of the testator, it becomes immediately operation for the benefit of the beneficiaries. Thus one can implement complete succession planning in his/her lifetime and avoid any financial loss.

Living Will or a Living Trust

The question is not difficult to answer now. A living will is a advanced health directive to end the life support. But its not a wish to bequeth the legacy to loved ones. The “Last Will and Testament”, executable at death meets that objective. So even after writing a living will the basic question which special needs parents have in mind remains – how to ensure the continuity of child care if such situation arrives. From an effective estate planning for the child a living will is not the complete solution. Neither this document is a replacement of a trust. Moreover living will has been approved now so it will take ysome time to know how it succeed.

Contrary to this a living trust has been found to be a very effective tool addressing the above concern. The trust has following advantages:

  1. It helps parents understand the trust structure and its functioning in their lifetime only. This makes it easier to take any financial decision regarding special needs child care.
  2. The trust continues managing child affairs irrespective of what happens to the settlor or parents or trustees. Future trustees will be appointed and the trust will continue till the beneficiary is alive or objective is met.
  3. The trust will ensure the assets which are in the ownership of the trust cannot be claimed by any individual/creditors. This secures the legacy created for the child.

Thus there is no comparison in these 2 estate planning tools. In fact in my view both these tools will be an important element while planning for special needs child future.

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