Careful planning and consideration must go into divorce and custody agreements in order to protect the interests of the child, maximize access to vital needs-based services and supports, and preserve publicly funded disability benefits.
While the general statistic for marriages ending in divorce is 50 percent, it is as high as 75 percent to 90 percent for couples with special needs children. Divorce presents many challenges, especially for couples with children. Parents often strive to put individual differences aside and make decisions that are in the best interests of their children. When one or more of those children have disabilities, this is of critical importance. Careful planning and consideration must go into divorce and custody agreements in order to protect the interests of the child, maximize access to vital needs-based services and supports, and preserve publicly funded disability benefits. Parents and attorneys must carefully consider the needs of the child with disabilities and reflect those considerations in the language of any agreements that are signed by the parents or submitted to the Court. Below are some important issues to consider.
In most divorce situations, child support is required; however, where improperly structured, child support can cause a child with disabilities to be ineligible for Supplemental Security Income (SSI) and Medicaid benefits. The Social Security Administration considers child support “unearned income” and counts two-thirds of child support payments as income when determining eligibility for SSI and Medicaid. It is, therefore, recommended that the divorce agreement direct child support be paid into a special needs trust for the benefit of the child with disabilities. This trust is separate and different from any special needs trust created as part of either of the parents’ estate plans. Specialized legal consultation can help ensure that the trust is established and funded in a way that will preserve future benefits.
Custody and Residency
Consideration must be given to how a child’s residence affects the services he or she may need. For example, if, as a result of divorce, a child must move from one state to another, residential services and Medicaid eligibility will not continue. Parents will have to apply for services in a new state and will likely face waiting lists for services such as day programming and residential placement. Even a move from one school district to another can have disruptive effects on the child’s special education placement or respite care services.
Health Care Insurance
Maintaining health insurance coverage of a child with disabilities is critical. Thought should be given to including language in a divorce agreement that requires one or both parents to maintain primary or secondary coverage for the life of the child with disabilities.
Life Insurance and Disability Policies
It is quite common in a divorce agreement that one or both parties are required to maintain life insurance for the child’s benefit. While well-intentioned, when improperly planned, this can also cause future eligibility problems for SSI and Medicaid if the child with disabilities is listed as a beneficiary. To avoid this problem, insurance beneficiary designations must be carefully structured to direct the child with disabilities’ share to a special needs trust created as part of one or both of the parents’ estate plans.
Decision Making and Guardianship/Conservatorship
For children under the age of 18, custody and other agreements must describe how decisions will be made for the child with disabilities and who is authorized to make them. When a child reaches the age of majority, 18 in most states, he or she is legally empowered to make decisions on his or her own behalf, regardless of the severity of the disability. When warranted, however, parents should agree that the custodial parent may make application for guardianship and/or conservatorship before the child reaches the age of majority. They should discuss who will serve as guardian if neither parent is able to do so.
Estate Planning and Special Needs Trusts
Often, well-meaning family members plan to leave money to a child with a disability. Doing so, however, can have devastating consequences. It is, therefore, advisable that each party agree not to direct bequests under a Will or Trust or make any beneficiary designation to the child with disabilities; but, rather, to a special needs trust. Ideally this trust is created by one or both parents’ estate plans. Grandparents or other relatives could create special needs trusts but administering multiple trusts for a single person can be an administrative nightmare.
With careful planning and consideration, a divorce does not need to limit or disrupt services to a child with disabilities. Parents of a child with disabilities in a divorce situation are encouraged to share this information with their attorneys so that the interests of their child are protected in the process.