Northwestern Mutual

Caring for Dependents with Special Needs

Let us guide you through the process of special-needs planning.

Caring For Dependents With Special Needs

Special needs require special financial planning.

It takes a team of experts—including a specialized attorney, a financial professional and a social service professional—to navigate the complexities of special needs planning. We can guide you through the process, and will work with you to:

  • Understand available third-party or government benefits.
  • Manage the legal issues involved in planning for a dependent with special needs.
  • Develop an overall financial plan that helps you balance the complex needs and goals of your family—from retirement to education—with your responsibility to care for a dependent with special needs.

When planning for the financial future of a loved one with special needs, consider taking the following steps:

Set goals.

Develop a clear vision of how you want your dependent with special needs to live—and document your expectations in a letter of intent.

  • What kind of life do you envision for him or her?
  • How will he or she live without you?

Estimate the financial need.

Based on your goals, determine the cost of care for your dependent with special needs, keeping in mind:

  • Government programs or funding received today may not be available in the future.
  • The costs of current services may not be covered if a child is no longer part of the educational system.

There are a number of national organizations that can help you project the cost of caring for your dependent with special needs over his or her lifetime. 

Establish a special needs trust.

A special needs trust will help to ensure your dependent receives the care you expect throughout his or her lifetime.

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. But doing so has the potential to disqualify an individual from most government programs and even require that benefits received in the past be paid back.

Estate Planning White Paper

To avoid jeopardizing his or her program eligibility, consider establishing a special-needs trust. A special-needs trust allows you and other family members to leave assets such as money, life insurance proceeds or property to the trust, rather than directly to the person with special needs. A trustee—whom you will name—will then have authority to use funds from the trust to help care for your loved one with special needs. And as you establish the trust and name a trustee, make sure other members of the family are aware of the trust and understand the role it will play to help secure the entire family's financial future.

When caring for someone with special needs, financial planning is a necessity. But it doesn’t have to be overwhelming. By taking action today, you can positively impact the future of your family and loved ones in significant ways.

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