How to Plan for Children With Disabilities?

by Thomas D. Begley, Jr., Esquire, CELA

The Problem

The problem for a special needs child begins when parents are either deceased or physically unable to continue to provide the care that the child needs.  As long as parents are living, they will do everything necessary to see that their child lives happily and as productively as possible.  While parents hope that they will be able to care for their child for many years, it is critical to plan ahead.  When something happens to the parents, it is too late.  There are a number of things that need to be considered:

• Where will the special needs child live?  Are other family members willing and able to have the child move in with them?  Frequently, this is a good solution, but just as often it does not work out.  It is good to have a conversation with family members early on.  
• Who will take care of the special needs child?  Will family members have the expertise needed to care for the child or will the child need to live in a group home?  If the child does live in a group home, will a family member be able to look in on the child and make sure he or she is receiving the care needed?
• What will the special needs child do for money?  What will the child’s financial needs actually be?  Life Care Planners are available to assist.  The parents will describe what lifestyle they want for the child, and the Planner will allocate a cost to each of the elements believed to be important.  At that point, the parents know how much the child will need.  Then the parents have to determine where that money will come from.  Do the parents have sufficient assets?  Is life insurance a practical solution?
• Public benefits.  Is the special needs child receiving public benefits now?  If so, specifically what benefits?  What is the value of those benefits?  Will these benefits continue to be available?  Critical leaders in Washington have already announced an intention to reduce public benefits.  With the pandemic producing tremendous financial needs and ballooning our federal deficit, will these benefits be reduced or eliminated sooner rather than later? 

The Hartford Study

A few years ago The Hartford made a study showing that 62% of parents of children with disabilities had no plan for the future.  Of the parents that did have a plan, 65% had life insurance but, in many instances, this was term insurance.  Term insurance is good for many situations, but it is not a good solution for children with special needs because the needs never go away and the term insurance eventually becomes too expensive to maintain.

Special Needs Trust

A Special Needs Trust is established by parents for their special needs children.   These trusts are designed to ensure that public benefits, such as SSI, Medicaid, Section 8 Housing, SNAP (Food Stamps), LIHEAP (Utility Assistance), TANF (Temporary Assistance for Needy Families), DDD benefits and Group Homes can be accessed and/or maintained.

Conclusion

            Many parents procrastinate and do not get around to drafting a Special Needs Trust in a timely manner.  Frequently, the special needs child inherits money, because the proper trust was not in place and this causes a loss of important public benefits for the child.