Planning for your Child with Special Needs
Planning for you children’s future is something no parent wants to think about, their child living without them. This type of planning becomes especially concerning when a parent has a child with special needs. Many times these children can rely on their parents for daily tasks that some take for granted such as feeding, going to the restroom. This topic really came to light for me when discussing planning with my mother, I have a sister who has cerebral palsy and is confined to a wheelchair. So I personally have seen the struggles and now have a mission to guide those who need the help in the right direction to find the best solution for their families.
Some statistics about people with special needs:
- 6% or about 1 in 5 U.S residents has some level of disability.
- About 1 in 6 children have some level of developmental disability (2006-2008).
- Between 1990 and 2000, the number of Americans with disabilities increased 25 percent, outpacing any other subgroup of the U.S. population.
- Of the 69.6 million families in the United States, more than 20 million have at least one family member with a disability.
These statistics show the growing number of people with disabilities, almost everyone either has a family member or knows someone with a disability. So special needs planning is becoming more of a mainstream concern. It is sometimes difficult to try and plan for your child’s future because you as a parent and/or guardian are dealing with the daily struggles of therapy, IEP’s, finances, battling insurance companies for needed equipment, procedures and medication. This is a topic that MUST be addressed. It is a plan that all of the family should be involved in. Have a family meeting, sit down, make time for discussing this somewhat uncomfortable topic.
Some Questions to Ask Yourself:
- Have I updated my will?
- Is my child(ren) named as beneficiary on any life insurance or financial investment?
- Do other family members name my child(ren) (with or without special needs) as their beneficiaries? (Make sure all family is aware of your plans)
- Have I established a trust?
- Do I have a plan for my child(ren)?
There is governmental support in the form of Social Security Income (SSI), Social Security Disability Income (SSD) and/or Medicad, but if the child has $2,000 or more in substantial assets of his/her own they will NOT qualify for governmental support. This is why it is so important to work with an Attorney and Financial Planner that YOU TRUST. Some people think they are helping children/people with special needs by naming them as a beneficiary, when in turn it could be hurting them by disqualifying them from governmental support. Currently in Springfield, IL, special needs housing provided by United Cerebral Palsy (UCP) costs approximately $60,000/year. Not many people can afford to pay for their child to be housed for a longer duration. All who are receiving services from UCP receive governmental support.
Special Needs Financial Planning Life Phases:
- Money needs to last not only your lifetime, but your child’s
- At Diagnosis (start saving)
- Long Term (estate planning with a licensed attorney)
- School Age (IEP-private services not delivered by the school)
- Your Child Turns 18 (SSI-currently $721/mo)
- After high school (school , career development, employment, day program)
- Entering adulthood (residential options)
- Later in Life
Special Needs Planning Steps:
- Address preliminary issues
- Estimate probable costs
- Identify financial resources
- Choose trustee(s)
- Choose advocate(s)/guardian(s)/caregiver(s)/trust advisor(s)
- Execute will(s)
- Establish special needs trust
- Have a coordinated plan
- Letter of intent
- Update your plan
As I stated earlier it is very important to consult with your attorney and financial planner because everyone’s situation is different from another’s.
Sources: http://www.census.gov/prod/2012pubs/p70-131.pdf
http://www.disabilityfunders.org/disability-stats-and-facts
The Special Needs Planning Guide, John W Nadworny and Cynthia R Haddad, 2007.