ST. CROIX INSIGHTS
5 Steps to Developing an Effective Life Plan for Your Special Needs Child
BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC
1) Establishing your Goals:
Setting goals for yourself as well as your child or dependent with special needs is a must from early on. Thinking about where you want to be personally and financially in the future is critical. You’re not just planning for you and your spouse; you’re planning for your child’s future also. Starting this process can be difficult, but asking yourself difficult questions can help ensure your goals are fulfilled for you and your dependent:
- What lifetime opportunities do you want to provide for him or her?
- What experiences do you want him/her to have?
- How will he or she live without you?
- Where and with whom would he or she live?
- Have you consulted with an attorney and financial advisor who specializes in planning for people with special needs?
2) Assessing your Current Status:
When setting goals, you need to look at the feasibility of your goals and the best possible course of action to accomplish them. You should analyze your family situation, possible care givers, assets, liabilities, cash flow, current insurance coverage, investments and tax strategies. The sooner you start saving for your child the better. When saving, keep the special needs trust up to date and have the proper legal documents to back the trust up. Working with an attorney and financial advisor every few years is necessary to ensure that assets are owned or passed on in an appropriate manner to preserve eligibility for state and federal benefits, keeping in mind that the government is consistently changing.
Does your child currently own assets with a total value greater than $1000-$2000? If yes:
- Government programs or funding the dependent relies upon today may be reduced or eliminated in the future if he/she has over those amounts. Reallocation of funds is necessary.
- Work with an attorney to ensure state and federal benefits are accessed.
- Work with a financial advisor to help fund your child’s needs long term.
- What will the cost be for the special needs child after he/she completes the public education system?
- What will happen if you unfortunately become disabled? Will your income be sufficient to support your family’s current standard of living and reach financial goals?
- Will a full time caregiver be needed in the future?
- Are siblings willing and able to assist?
- Are they willing?
- Will the current health insurance continue to provide coverage once the child or dependent passes age 22?
- Eligibility for government benefits
- Social security income
- Social security disability income
- Will the person with special needs be able to earn enough income to support him or herself in the future?
- Is it necessary to be setting aside or increase the amount to help supplement his/her income?
- Are they financially able?
- Are they physically responsible?
3) Establishing your Plan:
Once you have an understanding of what is feasible for you to accomplish, developing an effective plan is what comes next. The plan should show the goals you have set up for yourself and your family under multiple circumstances. An effective timeline to reach the goals for your family will help aid in the completion of all necessary life events.
- Dying before the child
- Entrusting long term care
- Do you have a will?
- Have you named a guardian?
- At the age of 18 will he/she be able to function as an adult
- Who will apply for legal guardianship?
- Letter of intent
- Special needs trust named trustee
- Adequate funding
- Existing assets
- Future savings
- Life insurance
4) Executing your Plan:
Setting the plan into action is the most important step. The appropriate documents need to be in place with the appropriate wording. This will ensure the best care for your child with special needs. Without the correct documents and wording, you may jeopardize the eligibility for your child or dependent with special needs from local, state, and federally funded programs.
Assets need to be allocated so it does not affect the government program eligibility. Periodically checking to make sure your planning is correct in case of emergency is important. Also, if there is any chance relatives are leaving money to your special needs child, the assets must be allocated correctly. Checking in with relatives on regular basis is necessary. They should know where to leave money, if any, to ensure the best care for your dependent.
5) Keep Updated as Things Change:
Everyone knows that circumstances change. Therefore, making appropriate adjustments to keep your plan up to date is necessary to do. You must be able to keep up with government, family, income, and life changes. The more often a plan is looked at and changed to fit the needs of your family, the fewer last-minute changes will have to be made.
- Changing circumstances
- Continuous government changes
- Meeting with professionals
- Periodically checking in with relatives
Tools to Aid and Achieve Future Goals:
There are certain tools which will help you make the future plans you want for your child attainable. Having the necessary tools around you will make planning and working to fulfill their needs easier, giving them a life you have dreamed of since they were born. Having these tools will help guarantee you have your assets, trust, and life plans for your child with special needs placed in the correct places. Without placing money and assets in the correct places, as little as $1000- $2000 can disqualify your child from helpful government programs.
It’s critical that you work with an attorney to establish the proper legal documents as to maintain eligibility for state, local or federal programs. Here is a sample of documents that your attorney should discuss with you: Will, Trust, Special Needs Trust, Healthcare Directives, Durable Power of Attorney, and a Durable Health Care Power of Attorney.
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