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For parents who have a child with special needs, planning for the life of their loved one after they leave can be overwhelming. Breaking the process down into manageable parts and working with specialist professionals and companies can help.
“The top three structures a family should put in place to provide future protection for their child are around money management, personal care and housing,” said Michael Beloff, Certified Financial Planner, Partner and Certified Consultant in special needs at Belvedere Wealth Partners in Stamford, Connecticut.
Money management: If the child is receiving government benefits, such as Supplemental Security Income or Medicaid, parents will usually establish a so-called special needs trust that will protect assets to allow the child to access these benefits. The trustee is the person who oversees the funds and other provisions of the trust that are not under the child’s control, Beloff said.
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Life insurance is essential, said CFP Colin Meeks, founder of Maryland Financial Advocates in Baltimore.
âIt’s the cheapest way to fund a trust,â he said. “Because you need to know what’s left [from your estate] to take care of the child, it creates a certain bucket of money. “
Self-care: Parents should organize the services their child will need to live independently or semi-independently (eg, household management, medication management, doctor visits, personal care, etc.).
These supports may be overseen by a court-appointed curator (or guardian, depending on the state) who makes all decisions regarding an individual’s financial and / or personal affairs, or by someone with power of attorney, who can make decisions, as well as an individual, said Beloff.
Parents are encouraged to write a âletter of intentâ, a common planning tool that serves as a guide for those who will care for the child in the future.
According to the Autism Society, it should cover family history, medical care, benefits, daily routines, diet, behavior management, residential arrangements, education, social life, career, religion. and end-of-life decisions.
Lodging: When it comes to the child’s future accommodation, the location is more important than the house itself, said CFP Andrew Komarow, founder of Planning Across the Spectrum in Farmington, Connecticut. Parents should think beyond keeping their loved one in the family home, he said.
âIt’s more important to look at the individual,â Komarow said. âWhat interests and support do they need?
“Parents may consider retiring to a community that represents the best interests of the child.”
There is a trend toward more community living, said CFP Gordon Homes with WestPoint Financial in Indianapolis.
âThe state-administered Medicaid HCBS exemption programs allow people with disabilities to live in a house or apartment,â he said. âThe state, in turn, is staffing a group of like-minded residents.
Sometimes a group of families will buy a set of homes or condominiums, according to Planning Across the Spectrum’s Komarow. “We are seeing people rehabilitating houses to live in shared accommodation, which creates neighborhoods for people with special needs,” he said.
Build the team
According to Homes at WestPoint Financial, one of the important roles of a financial advisor is to teach parents how to approach other family members and friends about caring for a loved one with special needs.
âThey need these assurances in the conversation: that the government benefits will stay in place, there is a source of money, there is a team – like a care manager, behavioral therapist, personal care attendant, a guardian, etc. – and there is a letter of intent, âhe said.
It is essential to work with specialists in this type of planning, Komarow said.
âA trust is not just a financial plan,â he said. “Specialized trust companies may have, for example, social workers who will take care of the needs of daily living.”
But parents should also find lawyers with experience in planning for special needs, Komarow added. âDon’t tell them what kind of trust to build,â he said. “Instead, let them know what you would like to see happen and let the lawyer tell you what the right trust is for your situation.”
According to Charles Italiano, deputy director of Westchester Disabled on the Move, a special needs trust could add an additional $ 3,000 to $ 6,000 to a regular family estate plan, depending on its complexity and the region of the country.
Komarow recommends that parents check the websites of the National Elder Law Foundation and the Academy of Special Needs Planners for help finding specialist professionals.