We need to talk about it!

I know, I know... who wants to talk abou this, right??  But don't we spend so much time already trying to give our special needs kids the best possible quality of life right now.  But what happens when we're gone.  What happens if your child is an only child.  What happens if you have other children who are Nuro-typical and go off to collage, get married and have a family of their own?  What if we live a long life, but are not capable of caring for our special needs child when they grow into adulthood?  Planning for a special needs child with benefits such as life insurance 401K, saving accounts, are critical in helping families pay the huge expense of caring for and educating their children with special needs.  However, a child with special needs cannot have more than $2,000 in their names; if they do, the government could freeze benefits such as Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Income – money some families need to care for their child.

Here are a few things that I found on the Mass Mutual site that parents/caregivers should remember.

• If you have life insurance, make sure the policy does not benefit the special needs child directly; proceeds that are generally tax free should be paid into the child’s trust
• Do not give or accept financial gifts or assistance in the name of a child with special needs.  If you do, deposit gifts into a special needs trust that benefits the child.  these gifts can legally be given to the trust of a child with special needs and will not jeopardize government benefits if the trust is properly drafted to comply with your particular state’s requirements.
• Be aware: there is no difference between gifts of cash, bonds, stock, property, inheritance, annuities, art and automobiles; they all count against the child’s net worth

Another really good tip my cousin pointed out to me is a conservatorship.  When a child reaches the age of maturity 18 in most cases, but 19 or even 21 in some states and is not ready to make adult decisions, he or she is nevertheless considered an adult under the law.  A parent may find, that they are no longer allowed to handle their child’s money, gain access to their child’s health records, or make important medical decisions. It may be appropriate in these cases to consider a conservatorship.

All of this should be discussed with a attorney or financial planner to ensure the trust works best for the needs of the family and child.   

Check out this clip from Autism-Live from their show on May 8 where they talk about Special Need Trusts.

Sources:

Mass Mutal

The information provided is from my own research and is not specific for every family situation.  Please be sure to check with a Special Needs Trust Attorney or Financial Adviser to find a plan for your specific needs.