Your life takes a special turn when you have a special needs child. As you travel through early childhood and teenage years, your hands are held by public education and the services it offers.
You attend countless meetings. And you learn how best to advocate so that your loved one receives the care and support necessary to grow and achieve at their level.
You feel every bump. Share every bit of joy. And you worry about their future. Eventually, you realize the services and programs you've come to rely on will soon disappear.
Managing the transition from juvenile services to adult care presents one of the most significant difficulties and sources of stress for parents of children with special needs. It’s a new day. And you need a new plan.
You've Got Concerns and Questions
For many, this is a lonely time. As friends worry about college costs and the realities of “empty nests”, you wonder how your “little girl' or ‘baby boy” will be supported into their adult years.
- Who will oversee her care after you are gone?
- How do you go about planning for his financial support?
- Who will understand their emotional and social needs if something were to happen to you right now?
These fears can stop you in your tracks!
As hard as it may be though, you need to force yourself to look ahead. You'll want to establish a plan, so you are in control of your child's future.
Their guardianship and/or conservatorship is not something you want to leave to chance. Knowing you are creating a safety net for them will allow you to relax a bit and enjoy the moments of today.
Please take some humble advice and find a financial planner who specializes in working with special needs families.
They will help you understand the implications of your current financial and legal decisions and how they can affect your special needs child’s future.
A planner with knowledge about current government (federal and state) benefits programs is a must! They will help you put a plan into action.
You'll still have work to do of course. But you'll start sleeping a bit easier when you speak with a planner who knows what to do.
Planning for the Future Care of Your Child with Special Needs
These are some steps you may choose to follow when creating your plan for the care of your special needs son or daughter’s future:
Step 1: Supplemental Security Insurance (SSI)
The first major hurdle is applying for SSI. This can be a lengthy but necessary process! Even though payments may not mean much for his or her total financial future, SSI eligibility comes with a much more important benefit – access to Medicaid.
Once through the process, you'll know they will always have health insurance. This is big! Not a fun undertaking, but time well spent.
Further reading: How a Caregiver Can Apply for SSI on Behalf of a Child, on Abilities.com
Step 2: Create a Special Needs Trust
A special needs trust is the most essential part of your child’s long-term financial plan. This is where you can put the money you save or others give as gifts. Without worrying the funds will interfere with your child’s eligibility for federal benefits (Medicaid and SSI).
Additional reading: How to set up a special needs trust, on CNBC.com
Step 3: Write a Will
You need to specify what is to be done with your assets after your death. You need to make sure your assets are left to the special needs trust, not to your child. Again…..this will protect Medicaid and SSI benefits.
This is also where you can specify a guardian who will take care of your child. In choosing this person, consider who has bonded with your child. Who has the understanding and relationship needed to offer the financial, emotional and social support that will be required?
Step 4: Open an ABLE Account
An ABLE Account (Achieving a Better Life Experience Act) is designed for individual families to save for the sheer purpose of supporting individuals with disabilities.
Recently, the federal government has determined that 529 College Funds can be directly transferred into a qualified ABLE Account without a tax penalty.
The annual contribution is currently $15,000, not to exceed the total of $100,000. This money is used for qualified expenses. Again…this account is not considered a resource when determining continued eligibility for government benefits!
Further Reading: Check out this great detailed article on how to invest in an ABLE account, written by Tara Falcone, CFP® a CERTIFIED FINANCIAL PLANNER™, former Wall Street analyst, and founder of ReisUP LLC, as a guest post on Femme Frugality.
Step 5: Long-Term Care Planning
This is the latest step in most plans. You want to make sure your long-term care needs will not impact the safety and quality of life you are setting up for our child. There are a few ways to think about this.
You may consider a state Partnership for LTC (Long-Term Care). This is a private-public partnership where care is funded through a long-term care insurance policy. The policy either protects a pool of the client’s assets or all of their assets.
When the LTC contract is exhausted, you will automatically be approved for Medicaid while not required to be at the poverty level. This is a big decision in the final piece to the puzzle.
Further reading: Long Term Care Insurance Partnership Program, on American Health Care Association
The above Five Steps take focus. Some may seem simple and some more challenging. Some will cost nothing but time, and some require paying fees. But, action on these steps now will give you peace of mind down the road. Like it's done for my husband and me.
Today's article contributed by Diane, a friend of the Women Who Money team.
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