A Charted Special Needs Consultant or an estate planning attorney can guide you in developing a financial plan. A Government Benefits Specialist or Certified Life Care Planner (CLCP) can help you develop your plan and understand the costs associated with your vision. A social worker can help identify appropriate state, local and federal benefits, and locate experts who will work at a reduced fee
Financial Planning
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Providing for a child with complex needs affects families in many ways, and the financial impact of care is certainly one of them. Understanding your family’s resources and what assistance may be available is critical. But planning for a child who may become a long-term dependent goes beyond traditional financial planning. There are universal considerations, both legal and financial, in developing a strategy that addresses immediate needs as well as plans for the future.
Systems of care differ from one country to the next. While some of the content included in this chapter may be useful regardless of where you reside, it is based on systems in the United States of America.
Your child with special needs will become ineligible for certain benefit programs when they reach adulthood (age 18), so it is very important to plan in advance. Fortunately, there are ways to preserve eligibility for benefits beyond age 18. Here are some suggestions to help you prepare. Note that different states and jurisdictions have different laws and rules, so be sure to get advice specific to your situation.
Create a vision for your child’s care
Start by thinking about your hopes for your child and how their needs are likely to change over time. Consider living arrangements, medical needs, educational aspirations, and caregiving choices. Be sure to include family members as you discuss these future care needs.
Develop a Letter of Intent
Although it is not a legally binding document, a Letter of Intent can provide a blueprint to help future caregivers understand your hopes and wishes and guidance in providing future care. To help ensure that there’s no interruption in their care should something happen to you, create a document that includes:
- Family and medical history
- List of medical, social services and care providers’ names and contact information
- Preferred living arrangements and housing
- Education and participation in government programs
- Religion and values
- Daily routine and living skills, including likes and dislikes and favorite foods, activities, and entertainment
- List of interested parties who are the people who should be notified of important legal or other matters having to do with your child’s welfare
Learn how government programs work
Most US government programs, such as Medicaid and Supplemental Social Security (SSI), are income sensitive; they also have specific definitions of disability. Medicaid eligibility also varies from state to state. The US Social Security Administration also offers a helpful brochure, Benefits for Children with Disabilities, that can help you understand the program and its benefits. A Government Benefits Specialist can also help in this area.
Build your savings with ABLE
Even if your child qualifies for government assistance, there are a number of expenses that won’t be covered by insurance or other programs. This is why personal savings can be so important. In December of 2014, the US Congress authorized the creation of 529 ABLE Plans, which are tax-advantaged accounts that enable parents, grandparents, family members and friends to annually contribute a predetermined sum for the benefit of a person who is blind or disabled without impacting eligibility for certain government benefits. Your advisors can help you determine how these plans fit into your overall vision for your child’s care.
Prepare, review and update your will or trust and other legal documents
A will or trust declares how you want your estate to be distributed. It also names a legal guardian for your dependent if you pass away. You will want to regularly meet with your advisors to review your will or trust, retirement and/or investment account(s) and insurance beneficiary designations. Ask your attorney and/or financial advisor to review other legal documents such as power of attorney documents and healthcare proxies to ensure that they are relevant and don’t inadvertently jeopardize your child’s access to government programs.
Consider a Special Needs Trust
One planning tool that may be most helpful in helping you to provide for your dependent’s needs is a trust. A properly drafted trust gives you the ability to set aside money for the future without worry that these funds will interfere with your child’s eligibility for federal benefits. Many parents fund their trust with life insurance, which provides a cost-effective way to leave significant assets for your dependent’s long-term care. Because there are several types of trusts available that serve different purposes, and laws affecting trusts vary by state, you’ll want to consult with your planner to identify the right trust for your particular needs.
At some point most families consider what might happen if the parents can no longer take care of their child. They commonly write wills and appoint guardians to ensure the child’s protection and safety until they reach adulthood. But when you are the parent of a child or adult with special needs, that question takes on profound meaning. You may worry that your child won’t have the means to care for themselves. You may also have concerns about your other children, if you have them, needing to take on this responsibility.
Facing these realities can be difficult and emotionally draining. Planning for them, however, will give you greater peace of mind and increase your ability to focus on the present.
