What Is a Memorandum of Intent?

What Is a Memorandum of Intent?

If you are the parent of a child with special needs, you know that there are practical and financial challenges you must face raising a child with special needs. The need to have a comprehensive estate plan in place is heightened when you are concerned with protecting and providing for a child with special needs. As part of your estate plan, you may choose to include a special needs trust to ensure that your child is financially secure both now and in the future. The Coral Gables special needs planning attorneys at Stivers Law explain why you may want to include a Memorandum of Intent in your special needs planning component.


Special Needs Planning in Your Estate Plan

Most parents consider providing for their children to be an important estate planning goal. When the child you are providing for has special needs, however, extra care must be taken to provide financial assistance within your estate plan because making direct gifts can do more harm than good. If your child depends on assistance from government programs such as Supplemental Security Income (SSI) or Medicaid, a direct gift of money or assets could jeopardize your child’s continued eligibility for that assistance. Once your child reaches the age of majority, the law will consider him/her to be a legal adult, without regard for your child’s abilities or functional level. As such, your child’s eligibility for SSI and Medicaid will be determined, in part, by the value of his/her resources. Gifts made to your child, either while you are alive or after you are gone could easily put your child’s resources over the threshold for eligibility. Fortunately, through careful estate planning, you can avoid such a scenario.

What Is a Special Needs Trust?

A Special Needs Trust, also referred to as a Supplemental Needs Trust (SNT), is a specialized type of irrevocable living trust that allows you to set aside assets to be used to “supplement” the assistance provided by programs such as SSI and Medicaid. The assets held in an SNT can be used to pay for comforts and luxuries that cannot be paid for by public assistance funds. A properly drafted Special Needs Trust ensures that assets can be set aside for your child without worrying about the loss of much-needed assistance. Among the many additional benefits of creating an SNT is the fact that other family members may also contribute to the trust, either while they are alive or in their estate plan.

What Is a Memorandum of Intent?

A Memorandum of Intent, also referred to as a “Letter of Intent,” is an optional companion document to a Special Needs Trust. Creating a Memorandum of Intent (MOI) allows you to put down in writing important information that your Trustee should know about your child. Given that your Trustee will be responsible for deciding how and when assets from the SNT are distributed, it only makes sense that your Trustee should know as much as possible about your child’s abilities, routines, likes, and dislikes, and any interests they may have.

Although an MOI is not a legally binding document, it can be a very valuable addition to your SNT because it helps your Trustee with the practical aspects of administering the trust. If you have chosen the right Trustee, the information you include in your MOI will be invaluable given the fact that your child may not be capable of communicating that same information to the Trustee. This is your opportunity to give your Trustee as much guidance as possible. You may, for example, wish to include family and medical history, religious beliefs, and favorite activities, as well as some background information on your child’s upbringing. It is also a good idea to include information pertaining to the people and relationships that are important to your child in the MOI because those people can be an invaluable resource to your Trustee. Finally, if you have any specific wishes or hopes for your child’s future, include those in your Memorandum of Intent so your Trustee can ensure that those wishes are honored.

Contact Coral Gables Special Needs Planning Attorneys

For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about including a Memorandum of Intent in your special needs planning component, contact the experienced Coral Gables special needs planning attorneys at Stivers Law by calling (305) 456-3255 to schedule an appointment.

Author Bio

Justin Stivers is the founder and managing attorney of Stivers Law, an estate planning firm specializing in wills, probate, trust administration, and financial risk management services. Justin’s approach goes beyond just creating legal documents. From aligning investments with estate plans to ensuring comprehensive insurance coverage, he safeguards a client’s legacy from unforeseen circumstances. His commitment extends beyond individual transactions, fostering lifelong partnerships to provide ongoing support and guidance.

With an impressive track record, Justin is licensed by the Florida and the Tennessee State Bars. His professional portfolio boasts Series 65 registration as a Registered Investment Advisor, the Wealth Management Specialist™ designation, and a 2-15 License for Health, Life, and Annuities. His dedication to excellence has earned him positions like Board Member of the Estate Planning Council of Greater Miami, Business Eagle Member of the Florida Justice Association, and active membership in esteemed organizations like the American Academy of Estate Planning Attorneys.

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