On January 27th, Advice Chaser will be hosting a lunch hour webinar on the topic of “Six Steps to Creating a Special Needs Plan.” The webinar will feature National Social Security Advisor Barbara Bush. Special needs parents won’t want to miss this one! In the meantime, however, let’s talk a little about what a special needs plan is and why you need one.
The greatest fear of many special needs parents is what will happen to their children when they’re gone or no longer able to care for them. While some disabled adults can still support themselves, some will need long-term support that they have always received from their parents. What happens when their parents aren’t there?
The good news is that there are plenty of answers to this question. While parents tend to be their children’s most obvious caregivers, there are many other options. The important thing is making the plan ahead of time so there is no uncertainty about what will happen.
What Is a Special Needs Plan?
A special needs plan is the complete written explanation of personal, legal, and financial intentions for your disabled child. It should include the answers to questions like:
- What kinds of support does your child need, and how will they receive them?
- Where will the child live when they stop living with you?
- Who else can be responsible for your child?
- Who has legal power of attorney for your child?
- What government funds will your child have access to?
- What private funds are available?
As you make your plan, you will also want to draw up necessary documents like will and a power of attorney. You should set up all your financial tools, like trusts and accounts, well ahead of when you need them.
How Should I Make My Child’s Plan?
The most important consideration should always be the needs of your child. What makes their eyes light up? What’s necessary for their happiness? What’s necessary for their survival?
Include your child in this discussion if at all possible. Ask your child’s doctor or other professionals to be sure you know what your child’s capacities and needs are likely to be in the future. And discuss your plan with every person in the plan, such as prospective guardians and trustees.
What Should Be Included?
The first thing to include is where your child is to live. If they currently live in your home, they will need a new living situation when you’re not around. Are there other family members willing to house them? If not, a group home or community-based program may be the right solution. If they need daily care, make sure you consider who could provide that care and what it will cost.
Next, plan how to fund your child’s living situation and other needs. You will fund your plan with a combination of public and private funds.
Public resources that may be available to your child include SSI (Social Security Income), SSDI (Social Security Disability Insurance), RSDI (Retirement, Survivors, and Disability Insurance), and Medicaid. Your child may qualify for SNAP benefits or Section 8 housing assistance. There may be additional local resources, depending on your area.
Private resources, like savings, can get in the way of accessing means-tested public resources, because if an individual’s net worth is too high, they won’t qualify. However, your savings for your child can be exempt from means testing if it’s kept in a special needs trust or ABLE account. A special needs trust keeps money separate from your child’s savings in the care of a trustee, while an ABLE account lets them manage their own money, up to $100,000.
You can set up a special needs trust as part of your estate planning or as part of a plan for your assets to go into the trust after you’re gone. You can also set it up while you’re alive. A trust needs a trustee, so choose someone who has your complete confidence: a relative, your lawyer, a trust company, or even a nonprofit.
Lastly, you need to choose a guardian for your child and give them a written power of attorney. This may or may not be the daily caregiver or the trustee. It should be someone you trust to make legal decisions that benefit your child.
Expert Support in Making Your Plan
Making legal plans for your disabled child isn’t something you should try to do alone. You may wish to engage a lawyer with a focus on special needs. For the financial portion, you can include your financial advisor. We can set up a call with a financial planner to help you start planning your finances appropriately.
You also don’t want to miss our webinar! It will be Wednesday, January 27th, at 12:00 MST. Tune in to hear much more about special needs plans, your financial resources, and how to craft a letter of intent that describes your dream for your child’s future.