As the parent of a special needs child, it is crucial to plan for anything and everything. The expenses of having a child that will require extra care can add up very quickly so it’s best to plan ahead. Use this guide to help you stay ahead of the curve and plan for any contingencies in your child’s future.
In the event of your demise
One of the most important things you can do for your child is ensure that they will still be taken care of should anything happen to you or your spouse. Choosing to right life insurance policy will be important to help cover future costs after losing an income or an increased need for outside help for proper care.
You also will need to write a will to discern what will be done with your assets after your death. Be sure to hire a lawyer who works for those with special needs and is aware of your state’s disability laws.
In your will you will need to specify that your assets are left to a special needs trust as opposed to your child. You will also need to name a guardian to care for your child. Choose a person that you are sure can handle the commitment of caring for a special needs child, and keep in mind that this person should already have an established bond with your child.
Once you have chosen someone, ask them if they can and will accept the responsibility long-term, because this will be a role they will have to manage past your child turning 18. A trustee will need to be placed in your will because they will be responsible for managing the special needs trust after your death. This person ensures that the money in the trust is spent only on your child and on the services that are appropriate to your child’s needs.
Be aware that trustees and guardians are often not the same person and your child’s guardian cannot spend any money in the trust without the trustees approval. Once your documents has been drafted, keep one, then give copies to and guardians or executors named in the will.
Create a special needs trust
A special needs trust is the most important factor in your child’s long-term financial plan. This is the best way to leave money and property behind to your child without jeopardizing their ability to receive Supplemental Security Income and Medicaid benefits. Since directly leaving funds or property to your child will make them ineligible for disability benefits, the trustee that you delegated in your will, will have complete discretion over the trust property. Because your child will have no control over the funds, SSI and Medicaid administrators will bypass the trust property for program eligibility purposes.
Please note that the trustee cannot directly give money to your child, as that would interfere with their eligibility for disability benefits. The trustee can spend trust assets to pay for caregivers, home furnishings, out-of-pocket medical expenses, and anything else deemed necessary for the benefit of your child. The trust ends at the beneficiary’s death or when the funds have all been spent.
Build your savings
As the parent of a child with special needs you will soon learn that insurance may not cover all of the medical expenses and therapies that your child needs. Start putting something aside monthly (no amount is too small), to cover any extra expenses that you may incur. Plan for future home modifications such as grab bars and a chair lift for the stairs and anything else your child may need. Again, be sure to not put this savings account in your child’s name because it will interfere with their SSI and Medicaid eligibility.
Raising a special needs child will require a lot of patience and love on your behalf. With so much already on your plate, finances are the last thing you want to be worried about. Ensure the future needs of your child will be met by taking the proper steps today.
Guest post: Ms. Meier operates HomeSafetyHub.org where she provides resources on preventing home injury and property loss.
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