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Planning for Your Child with Disabilities’ Forever
Aug-04-2020
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Guest writer Ed Carter joins us today with a topic on helping you and your family prepare financially when someone in your family has a disability. If you would like to work with him to help plan your finances, check out his website AbleFutures.com.
When you learn you’re going to become a parent, you’re instantly filled with a mixture of fear and excitement. And when you find out that your child has disabilities, many of these feelings are exacerbated. One of your first concerns may be how, exactly, your child will be taken care of in the long run. Keep reading for advice.
Open a trust.
Trust funds are usually associated with the ultra-wealthy. While it’s true the elite often have trusts, these are a useful financial tool for circumstances for families with disabilities. There are three types of trusts beneficial to those with disabilities. These are first party, third party, and pooled. Each allows your child the benefit of any inheritance or savings you might put aside for them without compromising their ability to receive government benefits, such as Supplemental Security Income (SSI). Keep in mind that SSI only allows an individual to have up to $2,000 in assets in their name, anything over this amount should be kept in a trust for their benefit.
Invest in burial insurance.
One of the most difficult aspects of parenting a child with a disability is knowing you could lose them. And this means it’s entirely possible you will wind up needing to pay for a funeral. At an average cost of more than $10,000, this can come as a significant financial burden. If your child has a life-threatening condition on top of having a disability, it’s a smart decision to invest in burial insurance; however, before you do, check reviews and policy offerings from different companies. Trusted names, such as Lincoln Heritage insurance company, offer burial plans that can cover funeral expenses as well as some outstanding debts in medical bills.
Appoint a guardian and a trustee.
While you will likely remain your child’s guardian and trustee throughout their lifetime, you must also prepare for the possibility that they will outlive you. Because of this, it’s crucial that you preemptively name both a guardian and a trustee. A guardian, according to Caregiver.com, is an adult with a legal right and duty to make decisions on the adult with disabilities’ behalf. This might be anything from living arrangements to medical care. A trustee is in a similar position, except their duties relate to finances instead of physical care. It’s common practice for the guardian and trustee to be the same person, although many financial advisors caution against it.
Save.
Building up a nest egg is the goal of most parents and future retirees. But when you have a child with disabilities, your nest egg may be divided a bit differently. You’ll need to start saving up early, and no amount is too small. It is also never too early to take advantage of benefits available to individuals with disabilities. In addition to SSI, your special-needs child may also be eligible for things like SNAP, depending on your family’s income. You can channel your money into stocks, high-yield savings, or investment accounts that are designed specifically for people with disabilities. Also ABLE accounts may receive deposits of up to $15,000 per year.
Saving money and planning for the future is never easy. And when you must accomplish this difficult task while considering the needs of a family member with disabilities, the challenge is even greater. But with a few smart choices, such as planning ahead for a funeral and other financial impacts and taking advantage of benefits available to your child, your efforts will go a long way toward ensuring their safe, healthy, and financially stable future.
