Financial Planning
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.
Your Team:
A financial advisor who specializes in the financial and estate planning needs of special needs clients.
A lawyer who specializes in managing assets in the event of incapacitation or death.
An individual who provides advice and counsel on topics relating to federal and state entitlement programs.
A type of case management nurse specializing in creating a care over a lifetime.
A trained professional who works with people, groups and communities to help them better their lives.
A Chartered 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
At some point most families consider what might happen if the parents can no longer care for the child. When you’re 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 themself. You may also have concerns about your other children, if you have them, needing to take on this responsibility.
Your child with special needs will become ineligible for certain benefit programs when they reach adulthood (age 18), so it is very important to be prepared. You can start by thinking about your hopes for your child and how their needs are likely to change over time. Facing this reality can be difficult and emotionally draining. Planning will give you greater peace of mind and increase your ability to focus on the present.
These topics are likely to come up as you research options and have discussions with professionals. Note that different states and jurisdictions have different laws and rules, so be sure to get advice specific to your situation.
- 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. - Government programs
Most US government programs, such as Medicaid and Supplemental Social Security (SSI), are income sensitive; they also have specific definitions of disability and eligibility. 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. - ABLE account
529 ABLE Plans are tax-advantaged accounts that enable parents and others to annually contribute a predetermined sum for the benefit of a person who is blind or disabled without impacting eligibility for certain government benefits. - Will or trust and other legal documents
Regularly review your will or trust, retirement and/or investment account(s), insurance beneficiary designations; also, legal documents such as power of attorney and healthcare proxies to ensure that they are relevant and don’t inadvertently jeopardize your child’s access to government programs. - Special Needs 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. There are several types of trusts available that serve different purposes, and laws affecting trusts vary by state.
The CPN guide “Introduction to Financial Planning” explains these topics in greater detail.
– Mary, financial advisor and parent of Ruth
