Estate Read Time: 3 min

4 Steps to Protecting a Child with Disabilities

Raising a child is expensive and can cost about a quarter of a million dollars, excluding college. For a child with special needs, that cost can more than double. If you’re the parent of a child with special needs, it’s vital to ensure your child will continue to be provided for after you’re gone. It can be difficult to contemplate, but with patience, love, and perseverance, a long-term strategy may be attainable.1,2

Envisioning a Life After You

Just as every child with special needs is unique, so too are the challenges families face when preparing for the long term. Think about the potential needs of your child. Will they require daily custodial care? Ongoing medical treatments? Will your child live alone or in a group home? Can family members assume some of the care? Answers to these and other questions can help form the vision of what may need to be done to plan for your child’s care.

Preparing Your Estate

Without proper preparation, your child’s lifetime needs can quickly outstrip your funds. One resource is government benefits, such as Supplemental Security Income (SSI) and Medicaid, which your child may qualify for depending on their situation. Because such government programs have low-asset thresholds for qualification, you may want to consider whether to make property transfers to your child with special needs.

You should also make sure you have an up-to-date will that reflects your wishes. Consider creating a special needs trust, the assets of which can be structured to fund your child’s care without disqualifying them from government assistance. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.

Involve the Family

All affected family members should be involved in the decision-making process. If at all possible, it’s best to have a unified front of surviving family members to care for your child after you’ve passed on.

Identify a Caregiver

In order for a caregiver to make financial and health care decisions after your child reaches adulthood, the caregiver must be appointed as a guardian. This can take time, so start setting this in motion as soon as you are able.

To do this, you can write a “Letter of Intent” to the caregiver and family to express your wishes along with information about your child’s care. This isn’t a legal document, but it may help communicate your desires. Store this letter in a safe place, alongside your will.

Outlining an approach for a child with special needs can be complicated, but you don’t have to do it alone. Working with loved ones and qualified professionals can help you navigate the various facets of this challenge. If we can help, please don’t hesitate to reach out.

1. Investopedia.com, January 9, 2022
2. AmericanAdvocacyGroup.com, May 3, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Related Content

Women and Financial Strategies

Women and Financial Strategies

Most women don’t shy away from the day-to-day financial decisions, but some may be leaving their future to chance.

Investment Challenges of the Affluent Investor

Investment Challenges of the Affluent Investor

Affluent investors face unique challenges when putting together an investment strategy. Make sure you keep these in mind.

Silver Sneakers 101

Silver Sneakers 101

Medicare’s popular program, offering free gym membership and health education.

 

Have A Question About This Topic?







Thank you! Oops!

Keep Your Umbrella Handy

Umbrella liability can be a fairly inexpensive way to help shelter current assets and future income from the unexpected.

The ABCs of Zero Coupon Bonds

Understanding some basic concepts may help you assess whether zero-coupon bonds have a place in your portfolio.

The Ivory Tower Changes Wall Street

Thanks to the work of three economists, we have a better understanding of what determines an asset’s price.

View all articles

Saving for College

This calculator can help you estimate how much you should be saving for college.

What Is My Life Expectancy?

Estimate how many years you may need retirement assets or how long to provide income to a surviving spouse or children.

Assess Your Life Insurance Needs

This calculator estimates how much life insurance you would need to meet your family's needs if you were to die prematurely.

View all calculators

Your Cash Flow Statement

A presentation about managing money: using it, saving it, and even getting credit.

Managing Your Lifestyle

Using smart management to get more of what you want and free up assets to invest.

Principles of Preserving Wealth

How federal estate taxes work, plus estate management documents and tactics.

View all presentations

When Special Care Is Needed: The Special Needs Trust

A special needs trust helps care for a special needs child when you’re gone.

Keeping Up with the Joneses

Lifestyle inflation can be the enemy of wealth building. What could happen if you invested instead of buying more stuff?

Making Your Tax Bracket Work

Have you explored all your options when it comes to managing your taxable income?

View all videos