Special Needs Financial Planning

 

 

 

 

 

 

 

 

 

 

 

Approximately 20% of U.S. households are affected by special needs and, depending on the source, it is estimated that there are between 30 million and 50 miilion unpaid caregivers.  Those statistics didn't mean much to me when my son, Matthew, was born in 1988. Later, when he was diagnosed with autism, I was part of those statistics.  At that time, we were told 15 in 10,000 people were diagnosed with autism - today, those statistics are 1 in 88.

I realized when Matthew was six years old that I needed to put together a financial plan for my family and that it would be for twio generations.  That process started with a Special Needs Trust and a lot of on-going research on personal financial planning.  

It has been said that financially providing for a special needs child is equivalent to paying for someone to attend Harvard University for life.  Very few of us could afford that but that's okay because no is asking you to do that - as long as you develop and execute a plan.

There are various steps in providing in special needs financial planning and it starts with ensuring that your child will be eligible for government sevices.   If the individual owns assets, they will need to be spent down.  Keep this in mind - the government wants your money but if you structure your family's finances properly, the long arm of the government is far less likely to get it.  You need to understand how to make your child eligible for Medicaid, SSI or Social Security disability when they reach 18.  The plan should start before that but even if that time has passed, there are steps that you can take.

You probably know that government beneffits will cover the necessities and not much more.   A "Special Needs" or "Supplemental Needs" Trust allows you to provide resoruces for enhancing your child's life.  Setting up and maintaining the Trust requires the expertise of attorneys with a background in special needs, trusts and estates.  The rules, inlcuding the tax laws, are tricky.

These are just some of the basics - there is so much more.  Many financial advisors have the competence to help you but don't know what it's like to stand in a doctor's office and be told that your child will not lead the life you envisoned for him or her.  My wife and I had that experience over 20 years ago and have fought for Matthew ever since - and we love him more than life itself.

May 30, 2015

We are still waiting for the NJ government to act on the implementation of ABLE accounts which will allow a disabled individual to have an account of up to $100,000 available for specific purposes without affecting his or her ability to receive government provided services.  An ABLE account should be viewed as supplementing a special needs trust rather than replacing it.

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