Special Needs Solution
It is surprisingly common for a family circumstance to include a special needs child; someone not able to function without support. For those of you who have a dynamic in your family it is not only painful, but it can also contain a degree of helplessness.
The question of how to support the special needs individual in the context of a modest to mildly affluent estate can be difficult.
Facts
Pete and Mary have a middle-aged male child. (Paul) for who relies on them for care and support. They are in their low 70s, own a $1 million home free and clear and have another $1 million in assets.
problem 1
The son in question is a difficult sort and as such none of the siblings are interested in taking up care and support once Pete and Mary are gone.
Problem 2
It has been suggested that $1m directed to a special needs trust could solve the problem by funding care and support for Paul. However, if Paul were to receive 1/2 of the estate the other 4 siblings would split the of half, receiving one eighth of the estate each. This option is disagreeable to all parties and there not an optoin
solution
Reverse the mortgage on the family home generation $500,000 in tax free dollars that don't require a payment. Place the $500k into a second to die life insurance policy that will pay $2.5m dollars tax fee at the second death of Pete and Mary. Deposit $1m into a special needs trust for care and support of Paul, returning the remainder ($1.m) to the estate.
The two problems have been taken care of here in this illustration.
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