The cost of raising a child from birth to age 18 has been estimated at $13,000 a year. Meanwhile, the costs for a child with a special needs condition, the American College of Financial Services cautions, is likely to be twice as much.
Special needs planning will include:
- setting up an emergency savings fund to cover three to six months of expenses
- arranging beneficiary designations on pension plans
- setting up a 529 ABLE account to provide for the child’s educational needs
Parents need to think ahead to a time when they themselves will no longer be there to protect the interests of their special needs child or adult. Thoughtful consideration must be given, the Commonwealth Community Trust cautions, to the following:
- What financial support will my child need when I am no longer here?
- Will my child be able to enjoy the same quality of life that they have now?
- Who will administer any trust I set up now, ensuring that the funds are well managed and used for the benefit of my child?
- How can I ensure that eligibility for Medicaid and Supplemental Security Income (SSI) benefits will not be jeopardized?
At Rebecca W. Geyer & Associates, we develop personalized estate plans for Indiana families that offer ongoing protection for special needs individuals, including plans for a child’s long-term care or for the care of a special needs adult. Most importantly, we make sure to protect special needs beneficiaries’ eligibility to receive government benefits.
While some families have sufficient assets to fund a special needs trust through their estate plan, many do not, specialneedsalliance.org points out. Life insurance can be an appropriate method of funding, with the Special Needs Trust named as beneficiary of the policy. The life insurance is typically on the life of one or both parents, or a “combined” survivorship or second-to-die policy may be used.
For families with a special needs adult or child, life insurance can be a highly useful planning tool.
– by Cara Chittenden, Associate Attorney at Rebecca W Geyer & Associates