Plan ahead to take care of your special needs child’s future
Taking care of your special needs child is a life-long process – even after you’re gone
We all have financial needs, but if you’re the parent of a special needs child, you have some unique considerations. There are legal, medical and financial issues you must give consideration to and plan for. There are three specific areas, according to the experts, that you must give attention to.
First of all, you must think about what will happen to the child after you are gone or if you become unable to care for the child. You will need to be sure the child will continue to receive the same level of care. A guardianship or conservatorship can help with this.
A guardianship or conservatorship is a legal mechanism that grants a designated adult legal power to make decisions for another person. When your child turns 18, he may need a guardian or conservator to manage certain aspects of his life. There are differing types of guardianships and conservatorships. A general guardian or conservator may have full decision-making power, which could include finances, living arrangements and medical decisions.
There are also limited guardianships or conservatorships, in which the powers can be limited to address the specific needs of the individual.
Another big consideration is government benefits. Make sure to structure how your assets will be distributed upon your death so that these benefits won’t be eliminated or reduced. One way to do this is through a trust.
A trust is a legal entity that holds and manages assets for the benefit of a specified individual. A trustee is assigned to manage the interest of the beneficiary. You can set up a special needs trust, which would allow the inheritance assets to become property of the trust and not the beneficiary. This would prevent any interruption in public benefits eligibility.
When planning for your special needs child, make sure to develop a savings plan. You will need to estimate how much it would cost to cover your child’s needs per month, then figure that out for his life span.
While that figure may be daunting, keep in mind that a way to take care of this is through life insurance, with your child listed as the beneficiary.