Planning for the continued care of special needs children is never easy, but a proposed law in the House of Representatives could make it a little less challenging for military retirees. The Disabled Military Child Protection Act, House Bill 4329, changes how military retirees can use their pensions in estate planning for their disabled children.
Under the current law, military retirees can put up to 55% of their monthly pensions aside to be used as a stipend for family members when the retiree passes away. This stipend can complicate special needs planning as it counts as income that could disqualify a special needs child or adult from receiving government benefits. The Disabled Military Child Protection Act proposes to allow military retirees to elect to have their retirement benefits transferred to a Special Needs Trust upon their death. The Trust can then be used for the supplemental care of a special needs child without disqualifying that child from receiving government benefits.
The Disabled Military Child Protection Act is a step in the right direction. However, it is still a long way from becoming law and more is needed to protect the special needs children of military personnel and others. If you have a special needs child, talk to an estate planning attorney about your options to provide continued care for your child.