Families with special needs children need to plan their child’s future carefully in many regards, and financial concerns are, by necessity, a big part of planning. While the average cost of raising a child from birth to 18 is about $250,000, according to The American College of Financial Services, the cost to raise a child with special needs can easily be twice that amount.
WTNH’s recent article, “Financial planning for families with children with special needs,” advises that working with a team of different professionals can help parents manage both the financial and non-financial aspects of providing care. Here are some of the key roles:
Caregiver. Working with a caregiver can help manage the challenges of providing care and addressing everyday responsibilities. The cost will be commensurate with the level of care required, so determining the need will be important to creating a budget.
Estate Planning Attorney. A lawyer who specializes in estate planning can help create a special needs trust to shield assets for a beneficiary with special needs, while preserving her ability to qualify for government programs. An updated will and living will with the names of a guardian and trustee will also be crucial to be sure that care is provided for in accordance with your wishes. A letter of intent can also be a helpful document for caregivers. It’s not a legally binding document, but it can provide important information like medical history, family history, information about your child’s preferences, and your wishes for the type of care they should receive.
Accountant. As a provider of care to a child or dependent with special needs, you may qualify for tax deductions for medical expenses, tax credits and tax-advantaged accounts. For individuals disabled before the age of 26, a 529A account can provide tax-free growth and use of the money to improve health and quality of life.
Financial Advisor. A financial advisor, who specializes in working with families that have special needs children or dependents, can provide specific recommendations on how to fund and protect accounts for disabled dependents.
Parents are advised to investigate any kind of benefits and support offered by the federal government, like Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). Depending on their employer, they may have access to flextime or child care cost reimbursement, as well as disability and life insurance. Don’t overlook local resources, since some counties and states have a host of programs available.
Reference: WTNH (August 7, 2018) “Financial planning for families with children with special needs”