Separation and divorce can be difficult enough, but when a couple has a child with special needs, separating can be even more complicated. In this episode, attorney Linda Malone shares some of the things a couple should consider if they are planing to separate and they have a child with special needs. Topics include, establishment of special needs trusts, government benefits, guardianship, and supplemental insurance among other things.
Note: Our Podcast, “A Year and a Day: Divorce Without Destruction”, was created to be heard, but we provide text transcripts to make this information accessible to everyone. All transcripts on our website are created using a combination of speech recognition software and human transcribers and could contain errors.
Jaime Davis: Welcome to Episode 3 of Season 5 of “A Year and a Day.” I’m your host, Jamie Davis. Today, I have the pleasure of speaking with Linda Malone. Linda is an attorney with the Howard Stallings Law Firm and their New Bern office. She practices primarily in the area of estate and trusts, often helping families plan for the needs of their special needs children.
Hi Linda, thank you for joining me today.
Linda Malone: Thank you for having me.
Jaime Davis: So separation and divorce can be difficult enough, but when a couple has a child with special needs, separating can be even more complicated. In addition to figuring out a custody schedule and determining how much child support should be paid. There are other issues that need to be taken into consideration. Linda, if a couple has children with special needs, what are some of the things they should be thinking about if they are planning to separate?
Linda Malone: Well, you’re absolutely correct that there are definitely some more complicated factors that come into play when you’re dealing with a couple, with a special needs child or even multiple special needs children. And so some of the things that I often recommend they discuss and we may consider when they’re separating is first of all, possibly establishing a special needs trust, and dealing with how that’s going to be funded.
Uh, we, we often talk about government benefits that might be available to the child and, and how that availability, uh, might be very important to the future of the child. Uh, we might often talk about actual guardianship and custody issues that are unique to parents of special needs children. And then there’s also discussions about supplemental insurance. They might want to talk about purchasing or even negotiating for when they’re talking about a separation that would help to address some of the concerns that, uh, fall under special needs trust, or supplemental to the government benefits.
Jaime Davis: So it sounds like we have a lot to talk about today. I’m gonna back you up to the first thing that you mentioned, and I believe that was a special needs trust. What is that? What is a special needs trust?
Linda Malone: A special needs trust is a trust that is established during lifetime. Although sometimes they, they can be established other ways, but usually during lifetime. And what it does is it actually sets up a way for money to be left to a special needs child or individual that will allow them to still qualify for government benefits. Uh, as most parents of special needs children know, as a function of the disabilities, they are often eligible for government benefits, but quite a bit of that is contingent on monetary assets or income that that child might be eligible to receive. It’s not always such an issue when they are a minor, but as they get older, that might become more of an issue. And so a special needs trust allows parents and grandparents and other people to set aside money that by the nature of the trust that money can be used for anything that the government would not otherwise pay for. So that in no way, does it keep them from qualifying for those government benefits, but it allows for money that is supplementary to be there, to pay for other things.
And that can be any number of things. It could be you vacations, it could be, uh, better clothing, or it could be a private room in a facility if government benefits will only pay for a shared room. But a special needs trust allows for that extra money to go somewhere without disqualifying them for those government benefits.
Jaime Davis: In your experience, have you ever run into a situation where a special needs child was almost disqualified from receiving their benefits because of money that was left to the child?
Linda Malone: Absolutely. Unfortunately I’ve seen it quite a bit. Uh, and that’s why advanced planning is so important. Uh, one that always jumps to mind is I actually dealt with a brother and sister where the brother had special needs issues and he lived in a group home. So he was high functioning, but he did live in a group home and the sister was helping to take care of everything for him, monetarily and their father who had somewhat been out of the picture for a while passed away.
And I’m sure he felt he was doing something very helpful by leaving the son about $20,000 on in his will. The problem was that if the son had received that $20,000, it actually would’ve disqualified him from being able to live in the group home. And so the sister came to me quite panicked because obviously the home had told her this and we had to come up with a creative way to get that money into a special needs trust for her brother, so that it would not disqualify him from living in the home. Obviously, if this is something that had been planned in advance and we had known what dad was planning to do, we could have done this quite a bit easier, right from the start and just explained to dad to go ahead and leave it in a special needs trust for the brother and it never would’ve been an issue.
But I do actually see that quite often when it’s, it’s oftentimes grandparents, uh, think they’re, they’re being helpful by leaving money to a child with special needs, but unfortunately, uh, by doing so almost every time, it’s actually going to cause more problems than good. If they have not done proper planning for a child with special needs and made sure that it’s going to be directed into a trust that’s going to allow for those government benefits to continue.
Jaime Davis: I think that’s really good information for folks to know so that they don’t inadvertently potentially harm the child with, with their good deed. Um, in the context of a separation and divorce, you know, a special needs trust is not something that the court can require, but it’s certainly something that folks could negotiate for when they are working on their separation agreement.
Linda Malone: Exactly. It’s something that, uh, if you can get both parents to, you know, agree that this needs to happen, and especially if you can get in that separation agreement, perhaps obligations to maintain life insurance policies that might fund into a special needs trust. So that if one of the parents, particularly the parent that might be largely supporting that special needs child, if something were to happen to them and they pass away prematurely a life insurance policy that is required to be maintained so that that trust will be funded and there will be adequate, um, assets there to care for that child, you know, for the remainder of their lifetime could be an particularly important aspect of that separation agreement. Yeah, that’s a great segue to talk about child support. You know, child support in North Carolina is going to end when a child has turned 18 and has graduated from high school in, in most cases, even if that child has special needs.
Jaime Davis: Linda, what options can parents consider for supporting their special needs child once child support has ended?
Linda Malone: So just like we talked about just a second ago, you know, ideally if parents have some extra finances available, they could go ahead and negotiate to have a special needs trust funded, but obviously not everyone is in the position to do that. There are government benefits that are available, um, to most people that would qualify as special needs. Um, many people are familiar obviously with Medicaid. Um, Medicaid can kick in, it can provide for, you know, some at home care it can also provide for in facility care if that is necessary. And one thing that I always do recommend to clients when I speak to them is to make an appointment with their local social services office and go in and discuss their actual situation because I have found practicing across many different counties in the state through my career that the different counties do actually have different programs available.
Sometimes there are programs that are unique to that county. It may be funded by a local grant. It may be a local donor that has helped to establish a program that isn’t being run by the county, but the county is aware of it and can advise, um, local individuals to apply for it. And I will admit normally you see those more around the bigger cities, just because there’s a larger population, uh, available. And, and frankly there tends to be more people with more money that are charitably inclined around bigger cities, but that’s not always the case. Uh, so that’s the most important thing that I think they can do as a parent. If you know, your child is approaching 18 and perhaps you’re already in an arrangement where you know, that funding is going to stop at 18, start talking to social services before they hit that mark, before the funding is going to stop and find out what might be available for them.
Uh, like I was indicating in the last answer sometimes, you know, there’s a group home that they could go live in, which allows that child a level of independence, but also is government benefit funded so that, you know, the financing part of that is not a hindrance to allowing that child to have the independence they might otherwise be able to manage on their own. So I think, uh, there are definitely benefits out there available, but making yourself educated about them and, you know, being open to going and sitting down and talking and finding out what’s available in your area is essential.
Jaime Davis: Your recommendation would be to just reach out to your local department of social services and, and talk to them about what the county may offer or what other programs they might know about.
Linda Malone: Yes. Uh, admittedly, it, it can change frequently. So, uh, that’s usually the best starting point.
Jaime Davis: And earlier you mentioned the possibility of life insurance, um, to help out with some of these expenses following the death of the parent. Is there any other insurance out there that separating parents should consider for their special needs child?
Linda Malone: So there, there can be. And, and obviously when we talk about insurance, everyone is different when we talk about insurability. So, uh, please don’t, there’s no guarantee obviously, but there are other types of policies available and it, uh, there’s for starters, sure. Most people have heard of long-term care policies, that if you’ve got an individual that, you know, their situation might progress, and there’s a high likelihood that in the future, they may need to be in a long term care facility. The earlier you can purchase insurance for that, the less expensive it’s going to be. And there’s, there’s many different types of policies, you know, while some people, or a few years back, we used to focus on just a strictly long term care policy.
There’s actually types of policies now that are actually life insurance that you can purchase on the individual, which if you’re dealing with a child that, you know, may not have a shortened life expectancy necessarily, or, um, you could purchase a life insurance policy, many of them now you could purchase them with a long-term care writer, which simply means that if they find themselves in a situation where they need to be in long-term care in the future, that policy funds to a certain extent, some of, of that long term care expense, um, if they never use it, then there’s life insurance. Instead, it’s not a use it or lose it. Like many of the older, long term care policies used to be, uh, many people were hesitant to buy them in the past with the thought that, well, I don’t know if I’m ever going to need to go into long term care this way.
It’s an investment either way, you know, you may get the long term care benefit. And if you don’t, there is at least a life insurance component to it. Um, so that’s, that’s one thing that a lot of people will look into or consider, and at least find out if they’re eligible for. Sometimes you can use those policies to, again, just like we talked about the benefits of having a special needs trust that you can use to supplement your needs. Uh, some, you can sometimes purchase policies as well, that will help to supplement at that point, that if you don’t have a long, a special needs trust that has already been funded, you may be able to purchase a life insurance policy that will provide you with supplemental income. If that time comes again to help cover things such as private room upcharges or one thing I have a lot of people talk about is need to get a lift chair or an adjustable bed or something along those lines that the government benefits alone would not cover. But perhaps you have a supplemental insurance policy that may be able to cover those types of expenses for you.
Jaime Davis: We’ve talked about child support and special needs trust, and also the insurance aspect, the child custody schedule, you know, it also ends when the child turns 18 for a special needs child who can’t take care of themselves. What can the parent do when he, or she turns 18?
Linda Malone: So once someone turns 18, that’s when guardianship comes into play, custody deals with a minor. And I, I’d like to speak on that a little bit more in just second. But when we’re talking about someone who is now over 18 in the eyes of the law, they are an adult. And when you have someone that is unable to maintain themselves, whether it’s their own healthcare decisions, or it may just be their own financial decisions, then you need to look into guardianship.
And that is a process through the court. What you would do is you actually apply to the clerk of court and someone needs to be named as, as legal guardian of that person. It keeps that person from being able to enter into contracts in their own rights, which unfortunately with many special needs individuals is more of a protective aspect so that they can’t be taken advantage of. Unfortunately that happens, uh, and guardianship cuts off their ability to do that. And it names the person that can enter into those for them. Perhaps you already have a couple with a child that’s over 18 that they’ve been maintaining. And now the, the couple is divorcing that’s part of the conversation is which one of us is the appropriate guardian. I’m not a fan of trying to get more than one person put in as guardian. It creates too much confusion, especially when you’re talking about, uh, healthcare decisions as well, simply because oftentimes special needs, uh, individuals that consistency of care is one of the most important aspects for them.
You don’t want two different people that somewhere down the road may no longer agree as to what makes sense for consistency of care. You really need that one person making that decision. And so that’s something that when a couple’s divorcing, uh, as sometimes I just have to remind them that we need to do what’s in the best interest of this child, regardless of your personal feelings and what you’d like to see happen, that’s what you need to be doing.
If you’ve got a child that has special needs, that is about to be 18, then you need to already be looking into having a guardian established for that individual, because no one can make decisions for them once they’re 18, without that guardianship aspect. And I know that oftentimes people say, well, I am the, the, the payee on their account or something along those lines.
But guardianship goes beyond that. That is, you know, opening and closing accounts, that is making healthcare decisions if necessary. It is full decision making and ability to access assets and speak with Medicaid on their behalf, um, all of that. And so that is definitely something that, you know, parents need to be mindful of, even if they’re not divorcing, frankly. But, uh, certainly when you’re talking about two parents who you’re not all going to be under the same roof anymore, and it’s not just going to be the two of you sitting down and making a decision, and one of you acting on it, which is how it probably has been handled up until then you need to really come up with a consistent plan as to how that’s gonna be handled going forward. So that one of you can be appointed as guardian.
I, I certainly understand, especially for divorcing couples, that it really doesn’t make a lot of sense that they both be the guardian, because they’re obviously getting divorced for a reason. And, and probably don’t agree about a lot of things. Um, but a question that I’ve gotten before is, is it possible that they could both be the guardian? So from my experience, courts aren’t as thrilled to do that, um, simply because again, it opens up a kind of avenue for confusion and, and butting heads. I won’t say that the courts won’t name two guardians, um, but usually it’s more frowned upon to be, to be blunt. Part of it would depend on how amiable the divorce is to be, to be frank. If you have a couple that’s already having trouble agreeing on things, I, I almost think the court would absolutely not do that because it’s not solving any problems at that point. Um, if you’ve got a couple that already can’t agree, why would they create a situation where it’s requiring them to agree, or one of them is going to act and the other one’s gonna come right behind them and, and do the complete opposite again.
Uh, one thing I always stress is the court’s consideration, both when we talk about custody of minors and in guardianship of people that are adults is the best interests of that individual. So it’s not about what the parents want or that they want to control this, or they don’t trust the other. It’s what the court determines to be in the best interests of the child. And I’m sure in your practice, you see that all the time when you talk about custody. Um, and it’s the same idea when you’re talking about guardianship of somebody who’s reached the age of majority, people can nominate themselves to serve as guardian, but the court is going to evaluate that and determine whether that person in their judgment is the best person to serve in that position. And generally the court is not likely, I would think to name two divorce parents to do it jointly. I, I won’t say it can’t happen, um, but I think that in the court’s viewpoint, it’s likely going to raise more issues than it is gonna solve problems.
Jaime Davis: So we really haven’t touched too much on, you know, custody of the special needs child until they turn 18. Um, in my experience, as a divorce lawyer, our judges tend to lean toward, you know, a 50/50 custody schedule, unless there is some reason why one parent or the other is not fit to exercise 50/50 custody, but it seems for the special needs child, a 50/50 schedule may not always be in their best interest. Would you agree with that?
Linda Malone: I, I would definitely agree with that when parents are divorcing. When any parents are divorcing, I think that, especially with minor children, custody is probably one of the first things that they’re concerned with, but with special needs children, that concern becomes even greater because consistency is something that many of these children require for them to maintain, um, their health and their way of living.
Many special needs children simply can’t thrive under constant change, which unfortunately a 50/50 custody arrangement often rotates around. So when you’re dealing with working out a custody arrangement for a, a special needs child, it’s often important for, again, the parents to remember that we’re talking about what is in the best interest of the child, and oftentimes, uh, planning for longer stretches perhaps at each parent’s home, so that it’s not a continual back and forth change that the child then has to try and readapt to, or adjust to these changes. If you can work out, you know, longer stretches so that, um, they’re not being uprooted and they can continue to stay in their constant routine, which is what many of these special needs children thrive off of is something that parents really need to be mindful of.
Another thing that often comes up when parents of special needs children are divorcing, obviously at least one of the parents is, is moving out and establishing a new resident. And as much as I know, they wanna spend time with their children as quickly as possible. It’s important that they be mindful of the fact that, that new residents may not realistically be able to provide the level of safety and the level of care that their special need child requires at least right off the bat. Um, oftentimes special need children need to have maybe facilities within the home to help, help them with their medical needs. You may need additional, just as simple as locks on all doors, because you have an autistic child that frequently unlocks the door and, and wanders off. And, you know, as much as you wanna have your child in your new home, as soon as possible, parents need to be realistic as to whether, you know, your new residents really meets the, the requirements, the needs that your child has right off the bat.
And, and perhaps at least initially you need to adjust visitation and custody schedules to just acknowledge that, Hey, I, I’m not able to maintain them here. Maybe for those long stretches right away, the same often comes up with when you have one of those parents that needs to go back to work, and they’re gonna have to rely on other family members, perhaps for childcare. You know, it’s not uncommon for a parent to say, Hey, I have to work, but they’re gonna be with grandma while I’m at work. Well, when you talk about special needs children, the question has to come up, you know, is grandma equipped to care for that child? Is she physically able to, uh, is she trained? Are, is there medical needs that this child has, that she might, frankly just not be trained to meet those needs? And so when you’re talking about custody, these are all things that really need to come up and parents need to be realistic about what those needs are for their children.
And again, hopefully you can get both sides to be a little bit cooperating in that, okay, if, if one parent’s willing to admit my home cannot handle this right now, we’re working on getting, you know, improvements made or whatever needs to happen that maybe I can’t do equal 50/50 right away, but I’m getting there, you know, ideally parents would be mindful of that and appreciate the fact that, you know, while they’re still keeping in mind the needs that the child really has.
Jaime Davis: Yeah. That’s a really great point.
Linda Malone: Especially when a couple has a special needs child, they really need to be able to move beyond the conflict with the other parent and really strive to put the needs of their child first. And, you know, for the, one of the parents that may mean, you know, even though they want to be an equal caretaker, that maybe they step back until they have appropriate accommodations or medical equipment or whatever it is that they need to ensure that the child remains safe and healthy.
Jaime Davis: Exactly. That’s exactly true. Well, this has been so informative, Linda, thank you so much. I would like to talk for a minute about our final four. Um, these are four questions that I ask our guests so that the listeners can get to know a little bit more about the guests. So question one, what’s one thing you wish you had known when you began your career?
Linda Malone: I think I had wish I had appreciated the importance of a work life balance. I, uh, very early on, was working many more hours and I was single at the time. And that was great. Um, but as I’ve gotten a little older and I have a family now I’ve come to appreciate the importance that, you know, I work to have a life, not I have a life to work. So that’s something that, um, I wish I had appreciated a little earlier on.
Jaime Davis: I can understand that. Question two – what is the one common myth about your profession that you want to debunk today?
Linda Malone: Well, you know, I, I guess I would say that I wish people realized that not all lawyers are bad guys and that some of us actually work in areas where we’re not fighting all the time and we’re really just here to help people. Um, the vast majority of my day is not spent even talking to other attorneys. I’m just talking to my clients and trying to work out their problems for them. And so we really do are of many of us are just problem solvers. And, um, we’re not here to milk you for every dollar that you have for just trying to help you out.
Jaime Davis: Who are the three people who have been the most influential to you?
Linda Malone: I would say my parents, uh, they were entrepreneurs and they really instilled in me the importance of hard work and believing in yourself. I would say my husband, because once he came into the picture again, he helped me realize that there was more to life than just a career. Um, and actually one of the first attorneys I ever worked for was in firm in Greensboro. And he was very important in, first of all, pushing me into this area of practice, but also he was very important in, in teaching me how to be a lawyer just in, in the little things such as it didn’t matter how young you were. If you were talking to another lawyer, you always called them by their first name, because you were both equals when you were at work and just little practice points like that are things that I’ve always remembered many, many years later. And I think that, um, you know, that, that had a big influence on my career and, and just how I’ve gone about my practice moving forward.
Jaime Davis: Right. There’s so many things they just don’t teach you in law school. So it’s great to have a good mentor.
Linda Malone: Exactly. exactly. There’s so many things you never thought about in law school.
Jaime Davis: Right? Last question. Have you read anything recently that you found to be particularly interesting or inspiring?
Linda Malone: I wish I had a great answer for some book that I have just read, but, uh, I have three small children so most of my reading time is spent on reading to them, which in its own its own way can be inspiring. But, um, when I’m not reading to my children, honestly, I’m usually reading news stories about tax legislation that’s coming out, which frankly, these days is not very inspiring. So I don’t have a great answer for you on that one. And I do apologize, but well, I would much prefer the children’s books to the tax legislation.
Jaime Davis: I will tell you that I generally do as well. Well, Linda, thank you for joining me today. If any of our listeners would like to contact you, what is the best way for them to reach you?
Linda Malone: I would say through my firm website, um, howardstallings.com. Through there, you can get my con, all my contact information, and I’m more than happy to have people reach out to me, and, and I answer questions for them.
Jaime Davis; I hope you all found this episode of “A Year and a Day” to be helpful. If you have any questions or comments, I would love to hear from you. You can email me at email@example.com. As a reminder, while in my role as a lawyer, my job is to give folks legal advice. The purpose of this podcast is not to do that. This podcast is for general informational purposes only, should not be used as legal advice and is specific to the law in North Carolina. If you have any questions before you take any action, you should consult with a lawyer who’s licensed in your state.