“Financial planning is daunting enough, but it becomes more complicated and critical when you have a child or family member with special needs.”
If you fail to provide any funds or support for a family member with special needs, their future may be left to a judge, and their well-being could suffer. If you leave too much, they could be ineligible for government services or be forced to pay back the state for some of their care.
SF Gate’s recent article, “Financial planning when a family member has special needs,” says the biggest mistake you can make, is making no plan. That frequently happens when a caregiver becomes so overwhelmed, that it prevents them from planning at all. However, it doesn't have to be a major undertaking in every case. A young family may just need life insurance and an estate plan, and your needs can change over time. You also shouldn’t overlook estate planning, because it's important to put basic safeguards in place, if someone relies on you for care.
The article says that if you do only one thing, write a letter of intent. This letter details a family's hope for an individual and their estate. It tells of your vision for the child or family member's life, who will be involved and how. This letter of intent can also include crucial information about medical, financial, or other essentials, like your loved one’s daily routine, likes and dislikes.
You should update this letter of intent annually.
You know that all the money in the world can’t provide the information parents may have in their hearts and minds for their children. Best of all, it's free.
It can be very complicated to understand what’s needed for each family's unique circumstances. You should get help in whatever way you can. One avenue is to ask other families with special needs for their input or consider any free training through advocacy groups or support groups.
This is a situation where a paid professional, such as an elder law attorney or a lawyer who specializes in disability law can be critical.
An attorney can educate you about the finer points of the various financial tools available, like special needs trusts, ABLE accounts and more. Commonly used financial tools, such as life insurance and Roth IRAs, take on new weight for families in this situation. An experienced attorney will have special knowledge on the implications the various tools will have on taxes, government benefits and more.
Finally, don’t forget to look after your own financial well-being. If you forgo taking care of yourself, it may mean you can’t provide the care for your family.
Reference: SF Gate (May 5, 2019) “Financial planning when a family member has special needs”