Special planning is a must for individuals with special needs

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 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 such as where the child will live, how a lifetime of medical expenses will be paid and many others. These important issues need to be planned for in advance and not left to chance.

Accidental giving
Planning for families with special needs 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 do not 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. However, doing so has the potential to disqualify an individual from most government programs and even require the individual pay back benefits received in the past.

Special needs trust
Fortunately, there is a way to help avoid this potentially devastating situation. A qualified attorney can draft a special trust called a “supplemental needs” or “special needs” trust which, if worded properly, can remedy this problem. This important planning tool 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 this type of 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. And, because the policy insures two people, the premiums of a survivorship policy are typically lower than those of single life policy.

Letter of intent
Parents provide information to caregivers or family member about their child verbally or in writing countless times. Yet, often there is not a clear direction in the event the child with special needs survives both parents. 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.

Relying on a team of experts
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 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.