Estate Read Time: 3 min

4 Steps to Protecting a Child with Disabilities

Raising a child is expensive and can cost over a quarter of a million dollars, excluding college. For a child with special needs, that cost can more than triple. If you’re the parent of a child with special needs, it’s vital to ensure your child will continue to be provided for after you’re gone. It can be difficult to contemplate, but with patience, love, and perseverance, a long-term strategy may be attainable.1,2

Envisioning a Life After You
Just as every child with special needs is unique, so too are the challenges families face when preparing for the long term. Think about the potential needs of your child. Will they require daily custodial care? Ongoing medical treatments? Will your child live alone or in a group home? Can family members assume some of the care? Answers to these and other questions can help form the vision of what may need to be done to plan for your child’s care.

Preparing Your Estate
Without proper preparation, your child’s lifetime needs can quickly outstrip your funds. One resource is government benefits, such as Supplemental Security Income (SSI) and Medicaid, which your child may qualify for depending on their situation. Because such government programs have low-asset thresholds for qualification, you may want to consider whether to make property transfers to your child with special needs.

You should also make sure you have an up-to-date will that reflects your wishes. Consider creating a special needs trust, the assets of which can be structured to fund your child’s care without disqualifying them from government assistance. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.

Involve the Family
All affected family members should be involved in the decision-making process. If at all possible, it’s best to have a unified front of surviving family members to care for your child after you’ve passed on.

Identify a Caregiver
In order for a caregiver to make financial and health care decisions after your child reaches adulthood, the caregiver must be appointed as a guardian. This can take time, so start setting this in motion as soon as you are able.

To do this, you can write a “Letter of Intent” to the caregiver and family to express your wishes along with information about your child’s care. This isn’t a legal document, but it may help communicate your desires. Store this letter in a safe place, alongside your will.

Outlining an approach for a child with special needs can be complicated, but you don’t have to do it alone. Working with loved ones and qualified professionals can help you navigate the various facets of this challenge. If we can help, please don’t hesitate to reach out.

1. Investopedia.com, December 14, 2023
2. AmericanAdvocacyGroup.com, 2024

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Related Content

Starting a Roth IRA for a Teen

Starting a Roth IRA for a Teen

This early financial decision could prove helpful over time.

The Cost of Procrastination

The Cost of Procrastination

Don't let procrastination keep you from pursuing your financial dreams and goals.

Leaving Your Lasting Legacy

Leaving Your Lasting Legacy

Want to do more with your wealth? You might want to consider creating a charitable foundation.

 

Have A Question About This Topic?







Thank you! Oops!

AI Tools Changing Retiree Entrepreneurship

The impact that Artificial Intelligence (AI) tools can have on retirees with a consulting or small business venture.

Red Flags for Tax Auditors

Here are six flags that may make your tax return prime for an IRS audit.

Social Media: #NewestBusinessLiabilityRisk

Social media may be a modern imperative for businesses looking to grow and build their brand, but it also introduces risk.

View all articles

Saving for Retirement

This calculator can help you estimate how much you may need to save for retirement.

What Is the Dividend Yield?

This calculator helps determine your pre-tax and after-tax dividend yield on a particular stock.

What's My Potential Estate Tax?

This calculator helps estimate your federal estate tax liability.

View all calculators

Questions to Consider When Buying a Vacation Home

Doing your research is key before buying a vacation home.

It May Be Time for a Financial Checkup

It’s never a bad time to speak with your financial professional about changes in your situation.

From Boats to Brokers

From the Dutch East India Company to Wall Street, the stock market has a long and storied history.

View all videos