Planning for the Future for an Adult Child with Special Needs

One of the realities of having a child with special needs is that those special needs might greatly impact the child’s ability to earn a living, making him or her financially dependent, to some degree.  Since most children outlive their parents, the parents of children with special needs often struggle to plan for their financial futures and try to determine how to provide for that child for a lifetime.  It is well worth the time and expense to sit down with a financial planning expert, like a lawyer, who has experiencing structuring trusts for families with individuals with special needs.  Before planning that visit, here are some things to keep in mind:

  1. Life insurance plays a critical role in estate planning.  The younger you are when you die, the longer your child will probably live without having an income stream from you to rely upon.  Furthermore, life insurance is relatively inexpensive when you are young.  When purchasing life insurance, make sure that you are considering actual costs for raising children, not average costs for people without special needs, and that you are looking at those costs extending past the average age of majority.
  2. Benefits change frequently. Depending on income guidelines and state rules, your child might currently qualify for benefits and subsidies based on the presence of one or more medical conditions.  Look at the history of the program before assuming that those benefits can be considered part of future planning.
  3. Fair is not always equal. You may have multiple children and taking care of a child with special needs may require leaving a disproportionate share of your estate to the child with special needs.  How is each child prepared to meet his or her own needs over a lifetime and how can what you leave them increase or decrease that?
  4. Be realistic about people when estate planning. When you establish a trust, you are going to appoint a trustee to distribute the funds.  The natural choices for trustee are family members, but be honest with yourself when you pick those people.  If that family member has ever been dishonest with you about money in the past, you have to seriously consider whether you can risk leaving them in charge of your child’s future.
  5. Start taking legal steps now. If you have an adult child with special needs living in your home, you may not have taken any legal steps to be declared a guardian of the child.  You cannot simply appoint a guardian for an adult, without having an adult declared in need of guardianship.  Is that something that will be necessary with your child?  If so, you want to handle that before you die, rather than leaving it to the future guardian to tackle.

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