Planning for your Child with Special Needs’ Future
Trusts? Advance Directives? Insurance? Guardianship? It is typically late at night when you are trying to fall asleep or during the middle of the night that these issues skip through your mind and one of two things happens: you reassure yourself you have “plenty of time” to plan because your child is still young…..OR…..the hard knot develops in the pit of your stomach/chest and you are unable to fall asleep!
A recent webinar, ‘Financial Planning: Kids with Special Needs,’ presented by Greg Zibricky, Founder and President of Provider Group Wealth Advisors broke difficult financial planning concepts and special needs planning into easy to understand components using the work “F.A.M.I.L.Y.”
F – Flexibility is essential. As parents, we must be open to modification or adaptation throughout any planning process.
A – Access to health insurance and government benefits can often be tricky and complex. MedCare encourages all families to explore as many government benefit programs your child may be eligible to receive. Medicaid Waiver programs are essential for individuals who will have lifelong physical and/or intellectual disabilities. More information about these important programs can be obtained from MedCare’s Social Worker, Karen McWhorter.
M – Money not only refers to the need to have financial resources available but also refers to how children with special needs are designated as beneficiaries and how trusts are structured and named so that your child with special needs is still able to keep government benefits and other important resources.
I – Insurance. Public insurance is available through Medicaid and if your child (and household) qualifies for Social Security Income (SSI). Children with Special Needs can also stay on their parents’ health insurance until the age of 26 years old….but talk with your Human Resources designee as early as possible to ensure you have completed the appropriate paperwork for this important exception.
L – Legal planning is essential so that you have a Will in place, Advance Medical Directives, and a Special Needs Trust fund for your child.
Y – Yak, Yap, and Yell!!! Planning and communication is essential to ensuring that your plans for your child will be carried out as you envision them today and tomorrow.
The most important part of planning for your child’s future is TO GET STARTED!! The first step you can take is to create a M.A.P. (Making Action Plans). The best M.A.P. will include your child with special needs. Be sure to include the following components in your M.A.P., which can consist of words, pictures, etc. Visuals are very helpful!
· Hopes and Dreams
· Current feelings
· Nightmares and fears
· Gifts and strengths
· Positive future plans
After your child’s M.A.P. is drafted, it can and should be revisited at regular intervals and important life transition points (middle/high school completion, turning 21, etc.). Flexibility is key to this part of the process and adjustments can be made to all components of the M.A.P.
With money and assets, the biggest key is that you want to maintain control of your child’s funds as much as possible, and therefore, assets should not be put in the name of your child. It is best to research insurance options with a professional who can fully explain the difference between the different types of policies: Term Life, Whole Life, and Universal Life, and advise which type is best for your situation. With whatever life insurance policy you choose, you can ask for an “In-Force Illustration” and your insurance provider will tell you what would happen if the policy went into effect from “today” for you to see how the funds would roll out and what would happen. It is best to request an “In-Force Illustration” from time to time so you know what will happen in the event of your death.
Parents of children with special needs should have a Will that designates a guardian if your child is under the age of 18 or if you have chosen to file for guardianship over your child. Many families provide for A Special Needs Trust in their Wills but this type of Trust can be established at any time.
A Special Needs Trust
· Protects the beneficiary (your child) from creditors/predators
· Preserves eligibility for SSI and Medicaid
· Provides distributions for supplemental needs
An example of how a Special Needs Trust can be titled was given as follows: “Gregory and Dawn Z, Trustees of Aaron Paul Z Discretionary Supplemental Needs Trust, Dated 2/27/2013.” One of the important things to remember is that you can change trustees if needed. Parents should contact a financial planner who has worked with families of children with special needs to find out about different types of Special Needs Trusts and what works best for your situation. For more information, go to www.metlife.com/individual/planning/special-needs/index.html#overview.
Finally, COMMUNICATE your desires and wishes for your child to your family and friends. There are several tools you can use to communicate this information – a “Provide Care Journal” or a “Letter of Intent” – you will outline your vision for where you want your child to “Live – Work – Play – Worship.” These items are very important if anything happens to you, so other will know what you were doing and continue with your plan for your child’s life. Go to www.specialneedsanswers.com for a guide, which can be found under the “resources” tab. The Special Needs Answers website can also assist with finding a Special Needs Planning Attorney. Other resources include www.specialneedsalliance.org, a group of Special Needs Attorneys. To find a Special Needs Planning Attorney in your area, Google: “Special Needs Planning Attorney, Houston, Texas.” (Italicized words can be changed to match your location.)
NOTE: This is intended to be a brief overview of the information shared and not intended to be a complete guide to the complex issue of planning for your child’s future needs.
Karen P. McWhorter, LMSW-IPR, CPS
Licensed Master Social Worker