[WSBAPT] Disabled Grandchild as Beneficiary of IRA & Brokerage Account

[David Faber]

Client is mom of adult child with developmental disabilities. The disabled
child does nonetheless have legal capacity as far as I can discern from
talking with Client (no POA or guardianship). Toward end of life, client's
mother (disabled child's grandmother) amended her IRA and brokerage account
beneficiaries to include the disabled child as a 1/6 beneficiary. Client's
mother has since died, in October 2017.

Disabled child is currently receiving public benefits and Client is also
receiving some benefits as the child's full time caregiver. These public
benefits are essential for both child and Client, and the value of the
inherited IRA is just a hair over $100k (and the brokerage assets are well
under $50k).

Client's sister is PR & Trustee of Client's mother's estate & trust.

I am trying to ensure that disabled child's inheritance does not completely
bungle his access to necessary public benefits. I am currently toying with
the idea of having the disabled child (and other necessary parties,
depending upon the ordering rules, which I am still awaiting from Charles
Schwab) execute a disclaimer so as to route the IRA and brokerage assets to
Client, at which point the Client would have the authority to manage those
assets, including putting the brokerage account and distributions from the
IRA into a Special Needs Trust.

My concern is that the disclaimer might still disqualify the adult child.
Any thoughts?

My other thought is to use a TEDRA Agreement signed by all beneficiaries of
the IRA and Brokerage Account to get the assets into the Special Needs
Trust. I am not sure if Charles Schwab would honor a TEDRA, however... I am
also concerned about the way in which the IRA would play with the SNT (I'm
guessing those assets would have to be drawn down in five years and would
suffer from the Fiduciary Income Tax, correct?)...

Are there other strategies people would suggest I look into? Grandma
clearly did not understand exactly what she was doing when she made the
adult child a direct beneficiary of her assets...

Best,
David J. Faber
Faber Feinson PLLC
210 Polk Street, Suite 1
Port Townsend, WA 98368
(360) 379-4110

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