This article titled “Taking Care of Disabled Heirs” was in the September 6, 2011 online edition of the Wall Street Journal.  Those of you who have loved ones with special needs might click on the link to this article to get an idea of the considerations and issues you and your estate planning attorney might need to think through.

When Loved Ones Need Help, Estate Planning Can be Tricky

Deciding how to leave your assets to your kids is tricky enough. If your adult child has a chronic disability, the task is much more complicated.

The issue affects many families: According to U.S. Census data, 12% of the population has a severe mental or physical disability.

Strapped state and local governments are tightening income restrictions for medical benefits and supportive services, which are typically paid for by Social Security and Medicaid. Those services are tough to find—or afford—in the private sector for many adults with disabilities so severe that they can’t live alone, parents and advocates say.

As a result, it’s increasingly important to structure an inheritance in a way that won’t disqualify a child for such benefits down the road…

Making matters worse, two-thirds of parents and caregivers don’t have a plan for where the person they support will live when the caregiver gets older, according to a June survey of families and caregivers by Arc, an advocacy group.

Here are some tips on how families can prepare…

Another option: a “special needs” trust—a vehicle in which parents can put assets for the child’s benefit without endangering government benefits. That would be a safer bet, says Ms. Braverman, since with a QPRT, changes in state law might cause the house to be counted as an asset for Medicaid purposes, disqualifying the child from benefits.

Families wealthy enough to leave a home to their child should consider a special-needs trust, Ms. Braverman says. Such trusts typically cost $2,500 to $5,000 to set up, says Harry Margolis, a Boston attorney who handles special-needs and elder-care cases…

Because the requirements for government-supported benefits are so exacting, it’s important to have your attorney research the specific income and asset requirements when you draft such a trust, Mr. Margolis says. He recommends naming co-trustees: One professional, such as a lawyer or a financial institution, along with one family member…

• Inheritance. To avoid disqualifying an adult child from getting services, some parents simply leave another child all their assets in their will. If there are three children, they might leave two-thirds to the child who lives closest to the one with special needs…