Without a special needs child, estate and financial planning typically have three major phases. The first phase is when the children are small. Concerns most parents have at this stage center around a catastrophic death in which minor children are left behind. In this case, planning for guardians and trusts for children are critical concerns. The second phase is when the children are grown and no longer dependent upon the parents. An inheritance then becomes a very nice addition to the children's estates, but is no longer critical. The third phase is when the parents' estate is large enough that estate taxes would be imposed, and tax planning is in order.
With a special needs child, however, estate and financial planning are very different. Very often, a disabled child will be dependent upon the parents or a caretaker/guardian throughout their lives. The stage where they become independent is either delayed significantly, or will never happen. As such, the concerns parents without special needs kids have are extended for parents with children who have special needs.
The lives and options for people with disabilities have undergone many changes over the last 25 years. Less than a generation ago, a disabled person really only had two choices: he or she could live at home with family members assuming the responsibility for caretaking, or be placed in an institutional setting. A generation of advocacy and hard work by parents and others concerned with people with disabilities has provided more options. Persistent parents have given special needs kids the ability to free appropriate public education and resources for care and increased independence.
Like most other things, however, proper care over the lifetime of a disabled person does not happen by accident. Only through proper planning can parents assure financial stability and proper caretaking for their children after they are able to provide it themselves. The reality today for families with disabled children are the fact the there is an increasing population of people with disabilities, which brings with it increased demand for services. Disabled people, like all of us, are living longer lives, and are faced with increased costs of long-term care, coupled with shrinking government resources. Parents simply cannot assume that their child's siblings will desire or be capable of providing care for the lifetime of their child. Consequently, undertaking planning at the earliest stage possible is critical.
Under these circumstances, the three most important issues to plan for are proper estate planning, proper financial planning and proper care planning. Each one, independent of the other will provide only limited support.
Proper Estate Planning
Establishing wills and special needs trusts is critical. Inheritances jeopardize many government benefits, including health care. Additionally, having the proper legal documents for incapacity are critical. What would happen if the parents became incapacitated? How would their finances be handled, and how would the child be cared for?
Proper Financial Planning
Understanding exactly what the cost of care for your child would be, and either developing a plan for funding those needs through life insurance or savings is critical.
Proper Care Planning
Should something happen to the parent, it is critical to have a plan in place, information at hand, and resources at the ready to care for the child. Establishing a life care plan can be the single most important component to care planning.
Having Good Advisors
Special needs planning requires the use of qualified professionals, trained and with the experience, understanding and temperament necessary to provide the kind of planning you need to have peace of mind. Do-it-yourself planning can lead to a disaster.
