By John Drachman
From coping with rare chromosomal disorders like trisomy 12 to visual impairment and behavioral problems, the challenges of special needs children can be difficult for parents to manage – or sometimes identify.
According to the U.S. Census Bureau, one in five children qualifies as a special needs child. Depending on the disability, parents may struggle with an avalanche of costly insurance deductibles, education programs, specialized physical aids and transportation requirements.
Your Rights as a Special Needs Parent
Many families with special-needs children under age 18 are ineligible for Medicaid unless their income and assets are low enough or their child qualifies for a special program in their state.
However, the Individuals with Disabilities Education Act (IDEA) requires school systems to provide free and “appropriate” education for children with disabilities until they graduate from high school. (Age at graduation varies depending on the state.) The Center for Parent Training & Resources matches resources and professionals with special needs families to improve their child’s long-term outcome.
Special Needs Take Special Planning
A few of the key considerations for initiating a special needs plan include:
- A life insurance review Parents of special needs children must have more life insurance than other parents to ensure there is enough to support their child into adulthood.
- Navigating benefits Important benefits include funding for physical and occupational therapy, potential reimbursements for education, as well as special schools and government assistance when the child becomes an adult.
- Juggling priorities Caring for a special needs child requires a continuous reality check among five core factors that compete for time and attention: financial challenges, government benefits, legal considerations, family support and emotional dynamics.
- Gifting? Think twice Wealth strategies that are improperly managed can actually hurt children with special needs. If the child has too much money in their name, they may lose valuable government benefits designed for their support. For example, any assets held in the child’s name can be held against them — savings bonds, 529 college plans, custodial accounts or joint bank accounts.
- Transitioning to adulthood Once your child turns 18, the government considers their assets separately from yours when determining their eligibility for Supplemental Security Income and Medicaid.
- Building a Special Needs Trust These legal entities allow monies to be deployed for the benefit of your special needs child in a way that does not put their potential government benefits at risk.
Starting the special needs planning process can seem daunting. One financial advisor we know counsels nervous parents to imagine they were adding a third person to their own retirement plan strategy. While a financial plan and ongoing guidance can help special needs families get focused and organized, another benefit may be even more important over the short-term –emotional relief.
John Drachman is a contributing writer to www.myperfectfinancialadvisor.com, the premier matchmaker between investors and advisors. John is an IABC award-winning writer, who applies his 30 years of financial marketing experience toward advancing the dialog between investors and investment professionals.
