Raising a child with a disability takes a lot of energy, perseverance, patience, and most of all–planning. You plan your nightly meals based on the color because your dear one doesn’t eat anything, red, crunchy, round or grainy. The same goes for where to shop, who to visit, when and if we vacation, and what TV programs to watch.
However, the most important factor we contemplate is who will take care of our child with a disability when we’re gone. It’s a tough pill to swallow, but one day, a child with significant disabilities will not have his parent with him. In many cases, a sibling or close cousin will care for him when the time comes. However, without financial planning, few people will be able to take on the expense. To help with this consider having a trust fund set up for your child. “But we’re not rich,” you might say. Don’t worry the trust fund will remain empty for quite some time.
To fund the trust take out a life insurance policy. The beneficiary of the policy will not be the child, it will be the trust fund for the child. It is important to get the help of a lawyer familiar with special needs trusts to draw up the paper work. The purpose of having the trust as the beneficiary and not the child is because the child will likely be an adult at your passing. The adult with a significant disability may be eligible for Social Security and government insurance, as long as his assets remain below a certain amount. Once the assets reach the cap, the adult child gets cut off of benefits.
Social Security and government insurance does allow the special needs trust. This is not a shady under the table tool I am suggesting. The trust must have restrictions specifically written in it that state the trust fund cannot be used for basic living necessities nor medical care. This wording is what prevents Social Security from viewing the trust fund as an asset. You will name a trust fund administrator in the trust. This should be someone intimately familiar with your child and not a paid accountant or lawyer.
Planning ahead will give you peace of mind when you are 80 years old and wondering what your child will do without you.
In the meantime, if you’re looking to alleviate some of the daily planning headaches that come with raising a child with special needs, check out Kristyn’s tips for “Teaching Flexibility to Children who Resist Change.”