Planning for the future…

Parents do their best to provide for and care for their children.  Life planning for children ensures they will continue to be provided for and cared for in the event of the parents becoming ill or passing.

If you’re a parent of a child with special needs, life planning is even more crucial.  Although you may feel overwhelmed and scared when planning for your own passing and the legal and financial decisions that go along with it, it will provide peace of mind that your child will be well taken care of when you’re unable to continue providing and caring for her.

Financial Considerations

To qualify for government benefit programs, such as such as Medicaid and Supplemental Security Income (SSI), children with special needs may not have more than $2,000 in assets. Parents, other relatives, and friends mean well when they gift a child with money or even a home, but it could make her ineligible for some benefits.

A special needs trust is a great way to save for your child’s financial future without jeopardizing her ability to receive government benefits.  Additionally, friends and family can make gifts of money to the trust without it hurting her benefit eligibility. “A special need trusts are often executed by a ‘disinterested party,’ such as a lawyer, financial firm or even a professional trustee,” notes Farmers Insurance.  A family member can serve as a co-trustee with a professional.

The money from the trust can be used for transportation, home health aids, education, rehabilitation, and any medical and dental care not provided by government benefits.  If your child were to need home modifications, the trust could fund that.  For example, if the doorways needed to be widened or the counters needed to be dropped, the trust could cover those remodels. Likewise, if your child needed a curbless shower or a stairlift installed, the trust could pay for the upgrades.

Legal Considerations

An individual can have both a health care power of attorney and a general power of attorney.  The person chosen is called the agent, and you can choose an agent for each role or one person can handle both roles.  A health care power of attorney authorizes someone to make medical decisions, including daily health care decisions and end-of-life decisions, while a general power of attorney authorizes someone to make decisions about financial and administrative affairs.  You are probably the power of attorney for your child, but you should have a backup person (a successor agent) named in case you were to become ill or pass. If you’re preparing for your passing, you can revoke your powers and assign a new agent for your child at anytime.

For a power of attorney to be valid, the individual must be able to understand and clearly express what she wants.  If your child has a severe handicap and is over the age of 18, she needs a guardian and a conservator instead of a power of attorney.  A guardian makes healthcare and other non-monetary decisions for someone, and a conservator handles someone’s finances.  One individual can serve as both, or two separate individuals can handle each role. You can name someone for the court to approve as your child’s guardian and conservator, but be sure you choose carefully.

Of course, an essential part of planning for your child’s future includes making sure they always have a safe, comfortable home to live in.  One option is to deed your house to your child.  When a home is given to another person without any monetary exchange, especially between family members, a quitclaim deed is often the route chosen.  The rules and laws surrounding quitclaim deeds vary by state, so check with a qualified attorney.

When life planning for your special needs child, ensure you have taken the necessary steps both legally and financially. To certify you’ve done the everything correctly without missing any steps, check with a qualified attorney.

Life planning is stressful, especially life planning for a special needs child.  But it’s also essential for the well-being of the future of your child.