Your Special Needs Family: Prepare a Financial Plan

Raising a child with a disability is expensive.

Professionals in the financial industry say that raising a child to adulthood costs close to $250,000 today. If you are a parent of children with special needs, you can expect to encounter costs as much as ten times that amount. And if you have a child who incurs regular medical costs, your expenses can reach more than $3 million over time.

What is the answer? Prepare. Prepare. Prepare. Here are some ways that you can organize and get everything in order:

Create a Plan

Your daily life seems busy and chaotic most of the time, and planning can be difficult in the wake of just trying to make it through the day. However, if you want to leave your money, home and assets to your child, and you want to make sure he is taken care of after you’re gone, you need to have a plan in place. Here are some tips:

• Develop a team of professionals. This may include experts such as an attorney, doctor, accountant and government benefits specialist to help understand the intricacies of Social Security, Medicaid and other programs.
• Write a letter of intent. This is a detailed account of your child's history, medical needs, doctors, allergies, and personality traits.
• Form a will. This gives your child's guardian a clear path regarding where your money should be distributed.
• Create a Special Needs Trust. This serves as a detached entity for assets so your child won’t be disqualified from benefits programs.
• Build a plan for growing your money. Saving and increasing funds for your child to use after you’re gone is crucial to his wellbeing.

Special Needs Trust

The idea of creating a special needs trust can be overwhelming because the stakes are so high. Caregiving is a very demanding thing, and you as a parent are well aware of this. However, getting this completed will be a big weight off of you. Having a trust in place ensures that there is a financial plan in place that will continue to provide your child with the highest quality of life possible. Otherwise, your money can get drained away very quickly and benefits can be lost.

Growth and funding options

There are many options that provide your family with government assistance and grants. These benefits are applied for through lengthy, complex paperwork, and so it is recommended that you seek counsel from an expert to maximize your chances of acquiring what your child deserves.

Life Insurance

Life insurance is another way to safeguard the wellbeing of your child. It's hard to know how long your child will live, but in most cases, he will outlive you as a parent. With this in mind, you should look into permanent life insurance; you won’t run the risk of your policy becoming too expensive or lapsing.

Investments and annuities

The interest earned on these options can range from 2% to 20% depending on the strategy and the asset. Professional advice is available on each of these and is highly recommended. This also includes your 401(k) and IRA holdings, which can be grown with an employer or on your own in a self-directed program.

When you have a child with a disability, some unique planning is involved. Work with your team and your family so you can develop the best means to provide for your child. Once your plan is created it will give you peace of mind that he is protected.

If you feel overwhelmed and you need help, please contact us.

American Disability Association is dedicated to the wellbeing and protection of children with disabilities and actively provides support to enhance their quality of life. Whether you are dealing with federal or state benefits or struggling with a school district to get proper education for your child, we have the resources to help you. Many individuals and families managing a disability are not aware of the wide array of services available to them, or they do not know how to apply for these benefits in a way that is likely to succeed.

Contact us for help. Dial (877) 283-4807 or email us at [email protected].