The financial planning process for families caring for children or adults with disabilities may seem overwhelming. ELI understands, we have been there both personally and professionally. These ideas are for all families of people with special needs to consider, whether or not you have lots of money or assets right now.
Here are some of our top tips to get you started
1. As parents, place your OWN financial security first on your list of planning goals.
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Make sure your current monthly expenses are covered
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Develop an emergency fund (3-6 months worth of expenses if you can)
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Save for your retirement
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Research Things to Know Before Filing Taxes for People with Disabilities
2. Preserve access to key government benefits.
Protect eligibility for entitlement benefits such as SSI. For example, do not have more than $2,000 in your child’s name when they reach age 18. Otherwise, they won’t qualify for SSI. This does not mean you cannot save for the future; look into opening an ABLE account.
3. Protect your vision for your child by putting a good estate plan in place.
Estate planning is the process of designating who will receive your assets and handle your responsibilities after your death or incapacitation. Work with a special needs attorney to write an appropriate estate plan, including a special needs trust. This will help provide for your family member’s needs after you’ve passed.
4. Check your retirement account beneficiaries.
Check who is named as beneficiary on all life insurance, annuities, and retirement plan accounts. Make sure you do not name “children equally,” or your child individually, as the primary or contingent beneficiary, since this could affect their eligibility to certain benefits (see #2 on this list). This same thought process also applies to wills.
5. Talk with your family about planning for the future.
Bring siblings and future caregivers into the conversation. Share your plans and ask about their involvement. Involve your child with special needs as much as possible too.
6. Protect parents’ income and assets in the event of parental death or disability.
Have different types of coverage, such as life insurance, long-term disability insurance, and long-term care insurance, for parents and primary caregivers. Make sure medical insurance is in place for all family members. These will help protect your family from future expenses relating to the care of your child with special needs.
7. Complete a Letter of Intent (LOI).
Help prepare siblings, future guardians, caretakers, trustees and successors by sharing the most important information about your child, and your wishes for how they should be cared for in your absence. You can download this fillable LOI.
8. Find out about guardianship and its alternatives.
Understand and seek the best option for your family member. Consider full or limited guardianship, conservatorship, power of attorney or health care proxy. Less restrictive options include Supported Decision-Making or appointing an advocate.
9. Work with experienced professionals to do your special needs financial planning and tax planning.
Make sure they have the right knowledge, background, credentials, and references. The professional you choose should have specific experience with special needs financial planning.
10. Build your “Team to Carry On.”
While no one can replace a parent, you can plan for a team of family, friends and professionals to carry forward your vision for your child with special needs. Identify and work with potential trustees, guardians, caregivers and support services to put that team in place today.
Exceptional Lives has resource directories for Louisiana and Massachusetts families in English and Spanish. (En espanol: MA and LA) There you can search for providers that have experience with special needs trusts as well as guardianships (or tutorships in LA). We have guides that are written in plain language to help you navigate the complex systems families with disabilities face. Some reference laws that are specific to the individual states, but the general overview can apply to families around the country. See all the Exceptional Lives resources here. Also browse our blogs or check our social media for videos to help further your understanding and connect with other families.
Other resources:
Social Security Administration’s list of State Protection and Advocacy System Organizations
