Financial Planning for a Child with Disabilities

Raising a child is expensive and can cost a quarter of a million dollars, not including college. For a child with special needs, that cost can more than double. If you’re the parent of a special needs child, 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 is attainable and can help bring some peace of mind.

Just as every child with special needs is unique, so too are the challenges facing their families when planning 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.

Without proper planning, 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 special needs child.

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.

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

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 can.

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 to communicate your desires. Store this letter alongside your will, in a safe place.

Planning for a child with special needs can be complicated and overwhelming, 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.