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The following information regarding estate planning is This Tel-Law topic is brought to you as a public service by the lawyers of the State of Oregon. The material presented is general legal information intended to alert you to possible legal problems and solutions.

"Estate Planning" means to make plans to leave property to your spouse, your children or other beneficiaries at the time of your death. The traditional estate plan simply leaves your property to your beneficiaries without any control over what the beneficiaries do with the property later.

The traditional estate plan will not work for many disabled children. Inheritance of property outright by a disabled person may pose several risks. For instance:

• He or she may not be able to handle the funds properly;
  
  
• If the disabled child who inherits the property is in a state institution, the state will then bill the disabled child for the cost of care;
  
  
• If the disabled child is not in an institution, he or she may lose welfare or supplemental social security benefits, which are necessary for the child to be able to continue to live on his or her own or with a group.

If you have a child who will never be able to live independently without assistance, it is important to plan for the care of your child after your death. .

There are two key factors to any good estate plan for the disabled child:

• You must have a thorough understanding of your child's needs; and
  
  
• You must understand the alternative estate planning tools that are available to protect disabled children personally and financially.

The most important estate planning tool is a will. A will names the beneficiaries of your estate, names a personal representative to administer your will and makes provisions for minor or incapacitated children. It is particularly important in the case of a disabled child that your will have provisions for personal protection of that child.

Depending on your wishes and your child's limitations, you have several ways to plan this protection in your will. The least restrictive alternative is to name an "advisor" for your child. An advisor can offer guidance and suggestions to a child who is able to make decisions about his or her personal or financial affairs independently.

The next alternative is to name an "advocate." The advocate assumes greater responsibility for a disabled person than an advisor. In addition to helping a disabled person make sound decisions, the advocate may also speak on behalf of the person, monitor services and may represent the person's interests. Neither an adviser nor an advocate can legally impose his or her wishes on the person represented.

The most restrictive form of personal protection is a "guardianship" because a guardian can make decisions for the incapacitated person. For example, the guardian may decide where the incapacitated person will live, and consent to his/her medical care. A guardian is sometimes appointed by the court for the well-being of an incapacitated person. The term "incapacitated person" means a person whose ability to receive and evaluate information effectively or make decisions is impaired to an extent that the person cannot meet his or her physical health or safety needs.

Parents are the natural guardians of their child only until the child reaches age 18, whether the child is incapacitated or not. If your child is incapacitated after he or she reaches age 18, you may wish to seek court appointment as your child's legal guardian(s) with the further provision that, in the event of the death of one parent, the surviving parent will remain as sole guardian. Parents who think that such a guardianship will be necessary after their deaths should nominate a guardian in their wills. The court must ultimately make the choice of guardian. The court will also decide the scope of the guardianship, such as whether the guardian will have full powers or be limited to making only certain types of decisions, such as medical treatment.

A will should also consider the child's financial security. A direct inheritance of money or property to a disabled child may make the child ineligible for certain federal and state benefits. If the child is institutionalized, a direct inheritance of money or property may be claimed by the state as reimbursement for institutional care furnished to the child. If you still want to leave the inheritance to your child, but fear that your child is incapable of managing the money or property, you may appoint a "conservator" for your child in your will.

A conservator is a person appointed by the court to handle the property of a minor or a person unable to manage his or her own affairs. Because of the cost involved, a convservatorship may be advisable only under certain circumstances. If the child's finances consist only of government support, such as SSI, Social Security, or veterans' benefits, the federal agency can set up a Representative Payeeship, naming someone to handle those funds on the child's behalf at no cost to the child and without court involvement.

Another estate planning tool that may be useful in insuring financial security for your child is a trust. A trust names a trustee who manages property for your child and pays the child's expenses or gives him or her money according to guidelines specified in your trust. A "support trust" may be instituted while you are still alive. The advantage of this type of trust is that there will be no interruption in the financial support of the disabled child while your estate is being probated. However, this type of trust can also be set up in your will, which means it will not go into effect until you are deceased.

Your trust must be flexible to account for future changes in both the needs and abilities of your disabled child and the statutes and regulations that may affect him or her. Your trust should be written to allow the trustee wide discretion to use assets in the trust and income from those assets in different ways at different times to meet your child's changing needs.

Another type of trust is the "special needs trust" or "supplemental needs trust." This type of trust is used when a child is receiving or may receive need-based governmental benefits, such as SSI or Medicaid (but not Social Security Disability, which is not need-based). To qualify as a special needs trust, the trust document must state that the principal and income are to be used only to provide extra and supplemental care, maintenance, support and education in addition to the benefits the child otherwise receives as a result of his or her disability from any local, state or federal government, or from private agencies. Unless this or similar wording is in the trust, the state will claim the resources in the trust to pay for the cost of maintaining the disabled person.

A parent's will can also name a successor guardian, conservator, advisor or advocate to take the place of the deceased parent. Often, parents will leave a memorandum about their wishes for their child's care, support, medical needs, housing, education, social and spiritual needs.

Wills, trusts, guardians, conservators, advisors and advocates are several tools that may be used to provide personal protection and financial security for disabled persons. You may find one or several of these ideas helpful in discussing your estate plan with a lawyer.

This information is from the Oregon State Bar's Tel-law service, a collection of recorded legal information messages prepared by the lawyers of Oregon. In addition to being online, the Tel-law service is accessible by telephone at 503-620-3000 or toll-free in Oregon only, 1-800-452-4776. A touch tone phone allows direct access 24 hours a day, 7 days a week. To receive a free Tel-law brochure listing the subjects available call 503-620-0222, ext. 0.