At some point, we all need to think about retirement planning. But for parents of special needs children, the advancements in medical science that allow for greater longevity for those with special needs also create a planning problem. An article from Kiplinger, “Create a Plan for an Adult Child with Disabilities,” encourages parents of special needs children to think about long-term planning for their child as a part of their retirement planning.
Here are the five things you should know when planning for a special needs beneficiary:
- Plan for two lifetimes: your retirement and your special needs child’s lifetime. You’re not just planning for your retirement. You’ll need to plan for your child’s needs as they age, too. There are certainly financial planning techniques you can implement now to financially plan for a child’s needs, such as creating a special needs trust, an ABLE account, or even purchasing long-term care insurance to minimize the drain on your finances should you need long-term care in future. Check out our recent post on this topic for more detail.
- Do everything you can to ensure your special needs child is eligible for benefits. The biggest thing you can do to ensure your child has access to the care they need in future is to ensure they are eligible for benefits now and won’t lose their eligibility. Clarify the planning you’ve done to loved ones and family members so they know how to contribute to any special needs trust, ABLE account or other instrument. Leaving an inheritance outright to a special needs beneficiary can jeopardize eligibility for benefits, so hold a Family Care Meeting to explain how your family and loved ones can best bequeath assets. To plan well, you’ll need to work with an experienced special needs and estate planning attorney.
- Trust planning is probably your best bet. You probably won’t want to just give assets to your children without special needs and assume they’ll provide for the special needs child. While it might seem like a good solution now, life changes and it could be a burden in the future or cause estate planning problems for your children. There are several types of special needs trusts you can use: a first-person trust, third-party trust or pooled trust. Click on the links to take a look at our previous posts on these trusts. You might also consider writing a letter of intent for caregivers, laying out important aspects of your child’s life, such as friends, family, favorite foods or other routines.
- The sooner you start thinking about housing, the better. After a parent passes, special needs adults need proper housing. But you don’t want to put off the search or leave the responsibility to someone who spends little time with your child. Finding a place in advance and moving any special needs children out of the house before you experience a decline can help dramatically in the long term. It helps the child emotionally with the transition, but also helps parents know if they’ve found a good fit. A special needs attorney can assist you in finding housing, whether it be assisted living or a licensed group home. You could consider purchasing a condo for a more independent special needs child and finding a special needs roommate so they can pool Medicaid resources.
- Get connected to organizations and support groups. Establish relationships with associations who will help you advocate for and support your child. Organizations can connect you with family support groups and long-term planning. Some have employees who regularly visit or call to check in on clients, as well as help them find recreational activities and jobs to pursue.
While this is a simple overview, planning for a special needs beneficiary can be a complex decision-making process. It’s best to get advice from your financial and estate planning professionals to take an in-depth look at how to best address your child’s needs. For more information on this and other special needs topics, explore our website and contact us to schedule your consultation today!
Reference: Kiplinger’s Retirement Report (December 2015) “Create a Plan for an Adult Child with Disabilities”