Raising a child with disabilities means ensuring they have access to the care and resources they need to thrive. Financial planning is an important part of that quest, as you manage everything from special education programs, to medical expenses, to long-term care arrangements. By taking some proactive steps, you can secure your child’s future – making sure their needs are met and giving you some well-deserved peace of mind.

Understand Your Child’s Needs and Available Resources

Every child and family’s needs are unique. Before you start planning, assess what your child needs now and what they will likely need in the future. This could include medical treatments, therapies, and equipment; private school, tutoring, or other educational resources; and personal care or transportation services. Private insurance will likely cover some of your child’s medical expenses. Your child may qualify for government programs like Social Security Disability Insurance, Supplemental Security Income, Medicaid waivers, and education and employment support services. Community organizations may offer grants, discounts, services, and social, educational, and employment support. Exploring what options are available to you can help you determine your child’s additional financial needs.

Establish a Special Needs Trust (SNT)

One of the most crucial steps in financial planning for a child with disabilities is setting up a special needs trust. Funds from an SNT can cover medical care, home modifications, and other essential services without affecting eligibility for government benefits. The assets someone receives through a special needs trust do not reduce their eligibility for government benefits provided by Social Security, Supplemental Security Income, or Medicaid. A trustee, someone you have named who understands your child’s unique needs, will manage the SNT.

Open an ABLE Account

An ABLE (Achieving a Better Life Experience) account can help you manage your child’s disability-related expenses. It is a tax-free savings option, like a 529 College Savings Plan, and it will not interfere with your child’s eligibility for government benefits, like Supplemental Security Income and Medicaid. ABLE accounts offer flexibility for education, housing, and transportation expenses, empowering families to meet immediate needs.

Plan for Future Decision-Making

As your child grows, you need to consider how their care and decision-making will be handled if you pass away or become unable to care for them and they are unable to do these things independently. Think about your child’s future living arrangements, career options, education, and social needs. Meet with an attorney to establish legal guardianship or power of attorney to be sure someone can advocate for your child’s well-being and future plans if you’re unable to.

Create a Letter of Intent

Writing a Letter of Intent for your child means documenting their abilities, preferences, routines, interests, and medical needs, as well as hopes and goals for their future. A Letter of Intent acts as a road map for caregivers, detailing your child’s preferences, routines, and medical needs, making it important for future caregivers, service providers, family members, guardians, trustees, or anyone else caring for or managing an SNT for your child. Remember to update your Letter of Intent periodically as your child’s needs and preferences develop.

Secure Your Child’s Future With Life Insurance

There are two main types of life insurance: term and permanent. Permanent life insurance can provide lifelong protection, ensuring your child’s needs are met regardless of circumstance. This option offers coverage that lasts your whole lifetime if you continue to pay the premiums. Your child with special needs should not be named as a direct beneficiary of the policy if they receive need-based government benefits like SSI or Medicaid, as it could impact the amount they receive. You can name a trusted family member or friend as the beneficiary or have your child’s special needs trust act as the direct life insurance beneficiary.

Seek Professional Financial Advice

Financial planning for your special needs child may seem overwhelming. A financial advisor experienced in special needs planning can turn an overwhelming process into a manageable one. These professionals can help you build a comprehensive, sustainable financial strategy that ensures your child’s needs will be met.

Proactive Steps Forge a Strong Foundation

Planning for the financial future of a child with disabilities is an ongoing process. Stay up to date about changes in government programs and financial planning strategies to make sure your plan can adapt – this is where the guidance of a financial professional is truly invaluable. With proactive planning and professional guidance, you can build a strong foundation that adapts to your child’s evolving needs.

Want to learn more about establishing a secure financial future for your child with a disability? Reach out today.