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A Special Needs Plan Gone Wrong

     Bob called with the following story. Dad had passed away a year earlier. He had three children, Bob, Sam and Sally. Bob told me that Dad’s will left everything to Bob and Sam because Sally, who is severely disabled and receiving government benefits, would otherwise lose those benefits if she received an inheritance.

     According to Bob, he and Sam had discussions with Dad about setting up a special needs trust (SNT) for Sally and placing 1/3 of the assets of Dad’s estate into that trust. “It was what Dad always wanted”, Bob told me. So, why was he calling? Because he told me that Sam had agreed to it but then changed his mind and backed off.

     “Is there anything that I can do to force Sam to put the assets into an SNT”, he asked. “Can we go to court and ask a judge to order Sam to keep his promise?”

     Unfortunately, without a written agreement in place, a judge isn’t likely to agree. Once Dad died and his will was probated, ½ of his estate was now Sam’s, to do with it as he wishes, even if Dad’s wishes are to the contrary. Spending a lot of money on legal fees to fight his brother is likely to be a losing battle.

     So how could the outcome have been different? I’ll share that with you next week.