Financial Planning for Special Needs Children

June 7, 2016


If Your Child Has Special Needs

If your child has been diagnosed with a special need, you want him or her to succeed to the best of their ability. Since there is so much to do in the present to keep your young children happy, you may forget to plan ahead. However, by setting up a financial plan accordingly, you can ensure a happy and fulfilled life in your child’s future, every parent’s hope.

5 Steps to Take When Setting up Your Child’s Financial Plan

You want to be the best parent you can be to your child, but you may be so worried about their future that you would rather not think about it. Instead of panicking over what the future will hold, put together a list of actions you can take now to best benefit your child’s financial needs.

Set Up a Special Needs Trust

This step is extremely important, as it will allow you to save money for your child’s future without interfering with possible Supplemental Security Income (SSI) benefits. If you create a trust, you can name it as the beneficiary of your estate instead of your child. This is important because if your child is beneficiary to an estate worth more than $2,000 he or she may not be eligible to receive federal benefits. It’s okay if you don’t have a large sum of money to put in your child’s trust, but build it gradually over the course of your child’s life.

Once you have made the trust, be sure to name a trustee. This designated person will make sure that in the event of your death, your child’s trust fund will only benefit him or her in the way that you have specified.

Create a Will

After you have created a trust, writing a will (with the help of a lawyer) is important to ensure that your assets be left to the trust you’ve established and not your child individually. In a will, you can also designate a guardian to care for your child. Be sure to choose someone, perhaps a family member, who cares greatly for the well being of your child.

Apply for Guardianship or Power of Attorney

When your child turns 18, he or she will be considered an adult with the ability to make financial and medical decisions independently. If you know that your child is not capable of doing this, hire a lawyer to help you apply for legal guardianship or power of attorney. This will allow you to continue making the important decisions regarding your child’s health care that your child may not be equipped to make alone.

Craft a Letter of Intent

In the event that something happens to you, a detailed letter explaining your child’s everyday needs and concerns will greatly help the guardian you have designated to properly take care of your child. Include this document in your will and be sure to give a copy to your child’s guardian as well.

In this letter you can include contact information for your child’s physicians, as well as current medical information and schedules. Be sure to update this letter with any changes each year so it is current and up to date.

Plan for Your Child’s Independent Future

Think about where you would like your child to live in the future. With you? In shared living? Would you like them to do a daily program where he or she can have job opportunity? This is beneficial to plan in advance so that when your child is too old to continue in the public education system at age 22, you already have a plan in place. If you plan in advance, you can save the necessary funds to ensure that your child continues living happily and with proper care.

Don’t Worry

Thinking about the expenses needed to provide a bright future for your child can be overwhelming. However, financial planning early on in your child’s life can greatly benefit their well-being in the future and take some weight off of your shoulders.


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