We probably all know mamas whose keiki have special needs. These mothers are superhuman warriors that often have had to advocate for their child endlessly, with school officials, medical providers, and peers. For many of these parents, their biggest fear is the idea that one day their child may need to survive on his or her own. All parents think about this concern, but for parents of keiki with special needs, this fear is magnified, because many of these children will not be able to support themselves when they grow up.
Planning for children with special needs takes extra consideration. Many children with special needs rely on government benefit programs such as Social Security Disability Insurance or Medicaid. Some parents, through a lack of planning, may end up leaving an inheritance to their child that is just large enough to get a child with special needs kicked off her benefits but not enough for her to live on for the rest of her life.
Other parents, in an effort to prevent that bad result, may decide not to leave any assets to the child with special needs so that the child can continue to qualify for Medicaid. They may leave all of their assets to their typically functioning children, trusting that those children will share and take care of their special needs’ sib. Unfortunately, this strategy can be rife with potential dangers. The child who receives the assets may spend all the money for his or her own purposes, or they could pass away themselves, and the assets could go to that sibling’s spouse or children.
Often a much better way to plan for a child with special needs is by using a special needs trust. Using this tool, parents can preserve their child’s ability to qualify for helpful benefits like Medicaid while still leaving an inheritance to their child. This can provide a financial cushion for the child to hire special care providers or equipment not covered by health insurance or their government benefits. In this way, parents can significantly increase their child’s standard of living.
Additionally, parents of keiki with special needs should be sure to nominate guardians for their keiki. This is important for all parents, but when children have special needs, they often require guardians after they turn 18, when a typically—functioning child would no longer need a legal guardian.
Sitting down and really anticipating the lifetime needs for a child with special needs can be a great opportunity to do some really effective planning not only for that child but for your entire family.
Image Credit: Obenauf Law Group