When creating an estate plan, parents typically want to treat their children equally. But for wealthy families whose loved ones are struggling with mental or behavioral health issues, a large inheritance may be more detrimental than helpful. How can parents leave an inheritance that will support their beneficiary rather than derail them? The Special Needs Planning team at Laidlaw & Simon has a solution: create a Special Needs Trust (SNT) with a built-in care committee.
Co-Managing Partner Moira Laidlaw, a trusted Special Needs Planning attorney with particular knowledge in navigating mental health issues from a Trusts & Estates perspective, explains that this type of SNT is “a traditional trust that accomplishes all the usual things a trust can accomplish. But if the beneficiary has mental health issues, especially of an episodic nature, then we can create these special provisions within the agreement and a committee of people who help the beneficiary stay on the course of treatment and keep things on track.”
Senior Partner Kimberly Bliss, who is also experienced in creating well-considered trust plans, puts a finer point on the value of this type of SNT: “Rather than leaving the trustee to navigate a care standard with no direction from the grantor, this is the grantor’s opportunity to really consider, ‘What does it mean to really support this beneficiary?’”
To assemble a care committee, Laidlaw and Bliss have their clients consider individuals who understand the beneficiary’s needs and can advise the trustee on difficult decisions and the best use of trust assets. The team may include a psychiatrist, a social worker, long-term advisers, or a trusted family member who has real-time information on the beneficiary’s day-to-day issues.
As for choosing a trustee, the partners recommend a professional fiduciary who can rely on recommendations from the care committee.” They dissuade their clients from assigning a relative to the role of trustee because “for people who struggle with mental health issues, it will destroy a family relationship if a family member is viewed as in charge of the money,” said Laidlaw. “It’s tricky with mental health. Adult children don’t want to be controlled, but they don’t always have insight into what they need.”
Stressing the importance of SNTs, Laidlaw points to the current mental health crisis in the United States and the alarming statistics on depression and suicide. She says that often when a parent has been a pillar of support for their mentally ill child, and “that pillar is removed, sometimes suddenly even, it is a very dysregulating event for the adult child, and they need even more support.”
Laidlaw, who is a frequent author and speaker on the topic of Psychiatric Advance Directives (PADs) and SNTs, has attracted national attention from clients on the issues surrounding loved ones with mental illness. She acknowledges that she and the Trusts & Estates team are providing a rare service. “We create really express provisions that are more out of the box than the typical trust drafting software out there,” she said.
Laidlaw and Bliss are truly leading the charge in the thoughtful and strategic formation of care committees to help make the right choices for both beneficiaries and their families. “I think of it as creating a team to support a beneficiary, to make sure that the trust fund is available to actuate good. You really want it, fundamentally, to make the person’s life better,” said Laidlaw.
