Caring for Dependent Adult Children.

           Parents
with dependent adult children with disabilities or mental illnesses are naturally
concerned about who will care for their children when they can no longer do so
themselves.  Dependent children, after
all, often live at their parents’ home, receive substantial personal care and financial
assistance from their parents and rely on their parents to manage their income
and expenses. 

          Often
a dependent adult child receives money from the Department of Social Security, like
Social Security Disability or SSI that the parent manages as the child’s
representative payee.  Hopefully, the
parent, where possible, is also the child’s agent for financial, legal and
property management, under a Power of Attorney, and also for health care
decisions, under an Advance Health Care Directive. These documents provide the
parent with much broader authority.  Otherwise,
in the case of an incompetent and/or uncooperative adult child, the parent may become
the child’s conservator.

Who will assist the
child when the parent is incapacitated or eventually dies?  If the adult child is competent and has a Power
of Attorney and Advance Health Care Directive then alternatives agents, such as
a trusted family member or friend, can be nominated.  But what if the child is not competent, is
uncooperative, or there is no available friend or family to act as an
alternative agent?

          If
the child is competent but there is no alternative family or friends who are
qualified and willing to assist then a possible solution may be a relevant not
for profit organization that assists such persons or a professional private
fiduciary.  If the child is incompetent
or uncooperative, however, then perhaps establishing a conservatorship while
the parent is alive may provide a solution.
A successor conservator can be appointed with less trouble once a
conservatorship is already in place.

          How
will the parent’s own resources remain available to assist a dependent adult
child when the parent is incapacitated or after the parent dies?  In case of the parent’s own incapacity, the
parent’s own Power of Attorney and Living Trust, if relevant, should expressly provide
that the parent’s resources are to be used to assist the adult child.  For example, the parent may wish to allow the
child may continue to reside at home, even if the parent is in hospital or a
nursing home, and that the child’s food and utilities are to be paid. Further
elaboration as to particulars can be provided in a letter of instructions by
the parent to the alternative agent. 

          What
happens when the parents eventually die and the estate is divided?  Simply giving assets directly to the
dependent child is a bad approach.  Instead
such assets should be held in a discretionary trust, and typically a special
needs trust.  Why?  Simply giving the child the assets outright
will not only disqualify the child from any needs based government assistance
but may likely result in the assets being squandered and the necessary care not
being provided. 

          The
right Pooled Special Needs Trust can receive and use the inheritance to hire a
personal care advisor to visit the dependent adult, see that the child is
taking care of him or herself, has food, transportation, and ensure proper
living conditions.  One such pooled trust
that specializes in caring for persons with mental illnesses and other brain
disorders and operates here in California is Proxy Parent. 

A pooled trust alone
may not be the entire solution because pooled Special Needs Trusts will not
want to own and manage real estate.  Real
property may need to be held in a separate Special Needs Trust for the dependent
child’s benefit managed by a relative, friend or private fiduciary acting as
trustee.  That way, the child can
continue to reside in the residence.