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Modern Estate Planning Blog

Elder Law & Special Needs Planning

The 4 Stages Of Lifetime Planning For A Special Needs Child

October 15, 2020

It is normal for any parent of a special needs child to want to plan out their future and give them the best life possible. Figuring out what they will need throughout their lifetime (and making sure they get that) is crucial. 

Children with special needs require more care and attention as their livelihood takes a bit more planning.

For example, the average cost of raising a child with autism is $1.4 million, and the figures for other forms of special needs like down syndrome, deafness or blindness are similar.

Nobody wants to put a dollar value on the price of raising a child, but if you don’t consider your finances or plan your child’s future carefully, then you could run into financial trouble.

If you follow this 4-stage planning process, you can have peace of mind knowing your child will have a better chance of living a happy and fulfilled life.

Stage 1: Choose guardians and conservators for your special needs child

If something happens to you, it is important to have a legal guardian designated for your child if they are under the age of 18. Depending on the specific needs, your child may need special care as an adult too. In California, this person is called a conservator, rather than a guardian. If you feel your adult child is incapable of making important life or financial decisions alone, you’ll need to seek appointment of a conservator to look after them and make decisions on their behalf. In most cases, the preference for conservator will be an adult parent. If this is not possible, then an adult sibling or perhaps a close family friend may be a good choice. 

Think carefully about whom you designate as the legal guardian/conservator of your child as it will have a significant impact on your child’s life. 

If your child with disabilities is high functioning, a conservator may not be necessary. In the instance where your child is capable of making their own decisions, but might need a little help or oversight, they can create a power of attorney. The agent they name in the power of attorney will then be able to make financial and property and/or healthcare decisions on behalf of your child.

Stage 2: Organize finances & benefits for your special needs child

To make sure your child has everything needed to have a safe and secure life, organize your finances and look into any benefits that might help your child. Here are three things we suggest to take care of to make your child’s life easier in the future. 

Look into life insurance

Buying a life insurance policy may be confusing, but the investment will be worth it to provide for the financial stability of your child after your passing. 

Having a life insurance policy will take some of the financial strain off your child and their future caregiver. 

To help you through the process of evaluating how much life insurance and what type is needed, we suggest you find a reputable and knowledgeable financial advisor to help. Work with an advisor who is concerned about your child’s future, not just the money. 

How much your life insurance will cost depends on what you need covered by your policy. Your financial advisor can walk through every step of this with you. 

Review your finances

Review your finances now to see if you are on track to achieve your goals for your child’s care. 

As your child grows up, you’ll be able to figure out what resources they will need. You may find you no longer require such a large life insurance policy or that your life insurance policy is too small. 

Keep track of what you are spending, too. This includes any unexpected out-of-pocket expenses you have had to pay regarding your child’s care. Budgeting for unexpected expenses is important, so budget wisely.

Determine eligibility for SSI and/or Medicaid

You may have tried to obtain SSI when your child was young only to find that your income was counted and made your child ineligible. When your child hits 18 years of age, it is time to take another look. At 18 your child is treated as an independent adult and your income not longer comes into the picture. Your child’s disability will now be looked at in a different way and it is worthwhile to determine whether your child is eligible for SSI and/or Medicaid. 

Your child’s assets have to be less than $2,000 to be able to qualify for both SSI and Medicaid. 

If your child’s assets exceed this, we advise you to speak with an experienced Special Needs and Estate Planning Attorney. They will be able to assess your unique situation and guide you through the best plan of action, or they’ll help allocate any excess assets that could be prohibiting your child’s eligibility for SSI or Medicaid

Stage 3: What to do when your child with special needs becomes an adult

4 Stages of Lifetime Planning for a Special Needs Child | Chubb Law Firm

When your special needs child turns 18, they are no longer legally a child. Depending on what their official medical diagnosis is, they might be ready to enter the world of college. 

With this, there is a lot to consider. You have to decide whether your child should stay in school and if they will require additional support if they do.

College might not be an option, but this does not mean your child will not have options. They can still make their own way in life. Talk to the local school administration to see if there are any opportunities for your child to attend employment or educational workshops. 

Stage 4: What happens to your child with special needs when you pass away?

It can be a scary thought for parents to leave behind a child with special needs, but there are precautions you can put in place to make sure your child will be okay. 

By reviewing your estate plan and finances, your child should have the necessary tools to carry on after you have passed away. 

Continue reviewing estate plans and finances

Continuously review your financial assets, savings and your estate plan so that when you sit down with your attorney and review all the documents and policies, the process is as smooth as possible. 

You can ensure your child has what they need, if you carefully keep track of all your assets. 

These documents will include the policies on healthcare proxies, your child’s appointed guardian/conservator, your will, and any trusts left for your child. 

Review ownership of assets and beneficiaries

Take a look of all your assets and decide what you will leave for your child. Do not forget to review your life insurance policies and any other services you have found that will help support your child long after you have passed on. 

At The Chubb Law Firm, our approach to special needs planning is grounded persistence. Figuring out what your child may need in the future is of the utmost importance, and we are here to help you make the best decisions for you and your child. Give us a call at (916) 241-9661 to discuss your options.

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Very professional, comprehensive service and extremely valuable. Heather and her team are very knowledgeable and we feel they have our best interests at heart. They make uncomfortable decision conversations possible and manageable. Working with Heather we were able to focus our attention on important issues that we questioned or purposely avoided for too long. Now that these questions are answered and our family is covered, it's a wonderful feeling.

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