How to Start Planning for Your Special Needs Child’s Future
Planning for the future is a lot more complicated when you have a special needs child. Not only do you have to make sure your own future is secure, but you have to plan and budget for your child’s long-term care. Should you pass away or no longer be able to care for your disabled child, you’ll want to know their every need is met, just as you’ve done for all these years. Here’s what you need to know as you start planning:
Securing Means-Tested Benefits
After you retire or pass away, your disabled child will be entitled to Social Security, Medicare, and SNAP benefits provided their income meets the federal guidelines.
- Social Security Income provides a modest monthly income to help disabled adults meet their basic needs.
- Medicare provides health care, including preventive care, hospital stays, prescriptions, skilled nursing facilities, and home health services.
- SNAP, or food stamps, provides monthly food assistance.
If you leave a large inheritance, it could have the unintended consequence of rendering your child ineligible for these important benefits. As such, it’s important to create a trust rather than bequeathing a large amount of money. With a trust, you can disburse funds gradually to protect your child’s benefits eligibility and ensure funds are managed effectively.
Special needs trusts are intended for needs that go beyond what government benefits provide. Trusts don’t affect benefits eligibility because the beneficiary does not directly receive countable assets like cash or investment accounts. Instead, a trustee purchases the goods and services that your child needs to live a happy and healthy life. A written letter of intent lays out your vision for the use of trust funds.
If you choose to establish a special needs trust, you’ll need to select a trustee. Family members, attorneys, and corporate trustees are all options. Since you want a trustee who both has your child’s best interest at heart and understands governmental benefits, it may be wise to pair a professional trustee with a family member who can serve as co-trustee or trust protector.
It’s also important during this time to consider whether purchasing a term life insurance policy would help protect your family. Since term life insurance is both affordable and straightforward, it’s one of the most popular on the market. However, it’s important to understand the rates before you select a policy, and using an online calculator can help you make an informed decision that will benefit your family if the worst-case scenario were to occur.
On top of preparing for your disabled child’s financial needs, you also need to consider how day-to-day needs will be met once you’re gone. There are two major kinds of care to consider:
- Caregiving is hands-on care for a disabled individual. Caregivers help with everyday tasks like cooking, cleaning, and dressing, as well as managing medical needs. The best caregivers provide companionship and emotional support on top of attending to basic personal needs.
- Conservatorship, or adult guardianship, is a legal designation that occurs via court appointment, and it only applies to adults who have been deemed incapable of managing their own financial, medical, and/or personal affairs. Conservatorship may be limited or full, depending on the extent of an individual’s disability. There are alternatives to conservatorship that offer moderately disabled persons a greater level of autonomy.
Whether you’re hiring a caregiver or a conservator, it’s essential to find someone you can trust with your child’s wellbeing. Family members are an option for caregiving, but they may not be prepared for the reality of caring for your child for the rest of his life. Since home care agencies have several trained staff, you can rest assured that your child will receive support even if the primary caregiver falls ill. Supportive group homes are another option, with 24/7 caregiving in a social setting.
Unlike caregivers, conservators are appointed by a court, not hired. You may nominate your preferred conservator in your will, but the decision is ultimately up to the judge. The best way to assure that your first pick is chosen is to select someone who is well-suited to the job. Consider potential nominees’ proximity, age, and ability and willingness to serve. A conservator can be a private individual, a professional guardian, or a nonprofit agency.
Planning for a disabled child’s future is a daunting task, but understanding the legal priorities is the first step in establishing a long-term care plan. Consult a trusted attorney and financial advisor to help you make the best possible choices for your child.
Written by: Jenny Wise
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