A Legal and Financial Checklist to Help Build the Financial Future of Your Child With Special Needs

If you’re a parent raising a child with a disability, your child’s health and comfort typically come first and foremost. But it’s just as important to prepare for your child’s financial future to help ensure a safe, secure and independent life ahead.

With more than 3.6 million U.S. children between the ages of 5 to 15 with a disability, financial experts say it is crucial for many parents to recognize they can take a few simple steps now to help ensure security for their child in later years. MassMutual and Easter Seals today issued a set of guidelines – 10 questions and answers people should consider to help lay the groundwork for a secure financial future for their child with special needs.

“When caring for a child with a disability, families often become so focused on day-to-day needs that they often lose sight of the larger financial issues that loom ahead,” says Joanne Gruszkos, director of the SpecialCare program at MassMutual, a coordinated program of future care planning, financial and legal strategies for people with disabilities and other special needs and their families. “Clearly, many parents need to start early and take a long-term view when preparing financially for their child’s financial future, and we’ve assembled this checklist to help them get started.”

In teaming up with MassMutual to provide parents with this critical information, James J. Williams, Jr., president and CEO, Easter Seals, says it is crucial for families to be fully prepared for the financial realities their children will face later in life.

“Each day, in communities across the country, Easter Seals provides the exceptional services necessary to give people with disabilities equal opportunities to live, learn, work and play,” said Mr. Williams. “We want the children with disabilities and families we serve to gain greater independence, and having the right information and support to make critical, long-term financial decisions can make all the difference.”

MassMutual and Easter Seals urge parents of children with special needs to ask themselves the following questions:
Am I getting the right advice? Since laws affecting people with disabilities change frequently and require specific expertise, it’s helpful to seek the expertise of a financial representative and an attorney who specialize in estate planning for families with special needs children. Consider asking other parents for references or check with local advocacy groups before embarking on your selection.
How should I develop an estate plan? Developing a detailed estate plan that best fits your family’s situation is essential to ensure your child’s long-term needs are met after you have passed away. Your estate plan – which can include wills, trusts, durable powers of attorney, health care proxies, and other documents – will outline how you would like your financial affairs handled and identify a guardian or guardians who will care for your child after you die. Consult an attorney and financial services professional who have a thorough understanding of your state’s disability laws to develop a comprehensive plan for the future.
What kind of government benefits is my family eligible for? Be sure you’re aware of any federal programs that may assist your family. Your child may be eligible for benefits under Medicaid, Medicare, the State Children’s Health Insurance Program (SCHIP), or the Children with Special Health Care Needs (CSHCN) provision of the Social Security Act. Visit the Web sites for these entities to check eligibility requirements.
Am I making the right choices with my health plan? Raising a child with a disability means you may incur high health care costs, so it’s important to understand and maximize benefits under your health insurance coverage. Know which services and procedures are covered, which are not covered and how to appeal if a claim is denied. If you and your spouse both work, compare health plans and select the one that’s best for your child.
Have I communicated my life care plan to close family members and friends? While the generosity of friends and family members is welcomed, a well-meaning friend or relative may inadvertently disqualify your child for benefits if he or she gives a gift or bequest that exceeds state limits. Once your estate plan is complete, notify close friends and relatives of your life care plan. If your friends or relatives want to include your child in their wills, your attorney can assist.
What are the financial needs of my child’s guardians? When you name a guardian for your child, ask yourself: Would the guardian need additional income to care for your child if you died? Would special funding be required for home renovations, specially equipped vehicles or in-home health aides? Should you plan for childcare services if, for example, your guardian worked full-time? If the answer to any of these questions is “yes,” discuss these needs with your financial representative or attorney.
If I die unexpectedly, how will my child’s guardian know what to do? A letter of intent, written by you, would provide detailed information about your child and instructions to assist those who will care for your child upon your death. Information typically includes emergency contacts, medical history, preferred living arrangements, education or work arrangements, recreational preferences and behavioral challenges.
When should I apply for guardianship as my child becomes older? Many parents assume they will retain guardianship of their child, regardless of age. However, once your child reaches age of majority (typically at age 18 or 21, depending in which state you live), you must file for legal guardianship. In many cases, the guardianship process is merely a formality. But it’s important to remember that guardianship is a court appointed procedure.
Where do I want my child to live in the future? When your child reaches adulthood, he or she will have the option of living in an apartment, house, condo, or an assisted-living environment. Whatever option is chosen, it’s important to begin thinking about this when your child is still young, as early as 10 or 11. Waiting times for placements in assisted living facilities can be as long as 10 years for the best facilities. If your child wants to live independently, he or she will need the financial resources and money management skills to do so.
What other long-term issues do I need to consider? While housing is a primary long-term issue, there are a number of other matters that must be addressed, including: education, work opportunities, recreational programs, lifestyle, daily transportation, medical costs and custodial care. Projections for each of these factors should be accounted for when determining your child’s financial needs in your child’s life care plan.
Source: MassMutual, Easter Seals