Without personal experience, it’s difficult to imagine daily life for a person with special needs. Often, a family doesn’t know what challenge each new day will bring and a “one day at a time” approach to most aspects of life is common. Yet, comprehensive planning, more precisely special needs planning, is especially important for these families.
One of the greatest concerns for parents of children with special needs is who, if not the parents, will provide a lifetime of care and support. Parents need to answer important questions:
- Where will the child live?
- How will medical expenses be paid for?
- Who will provide care for the child?
These issues need to be planned for in advance and not left to chance.
Special needs planning differs from other types of planning. Much more needs to be done to ensure a person with special needs will have a comfortable and fulfilling life while remaining eligible for government programs and benefits.
Children and adults with special needs are eligible for most government programs as long as they don’t own assets worth more than $2,000 (or as little as $1,000 in some states). You might not think twice about leaving money, life insurance proceeds or other assets directly to a child to help ensure his or her quality of life. Doing so has to potential to disqualify an individual from most government programs and even require the individual pay back benefits received in the past.
A qualified attorney can draft a special trust called a “supplemental needs” or “special needs trust.” If worded correctly, this special needs trust can remedy the situation.
A special needs trust allows other family members to leave assets, such as money, insurance proceeds or property, to the trust rather than directly to the person with special needs.
Life insurance is a cost-efficient way to help provide the financial support necessary to ensure the level of care and quality of life hoped for by the parents in the event they cannot do it themselves. By naming the special needs trust as the beneficiary, the proceeds will be paid directly to the trust.
One type of policy, a survivorship policy, is especially effective for special needs planning. The proceeds of a survivorship life insurance policy are payable at the second death, so the financial resources are available to the guardian the time they are needed most. Because the policy insures two people, the premiums of a survivorship policy are typically lower than those of single life policy.
A letter of intent is a valuable tool for parents to complete. It is essentially a “blueprint” of a parent’s hopes and intentions as it details the child’s history, daily needs, likes and dislikes, and the parent’s specific wishes and expectations as they relate to the child’s future.
It is important for families with special needs to seek guidance from a number of advisors with expertise in special needs planning including financial, legal and social services professionals. Professionals with special needs expertise are more likely to help obtain additional resources and services as well as continually provide up-to-date information on legal or governmental agency-based changes in the field.
A parent’s love alone will not protect the future of a person with special needs. Early planning can give parents the comfort of knowing they have done all they can to provide the support and resources necessary for a comfortable life.