It’s common for parents to worry about their kids’ futures, but if your child has special needs, you may be even more concerned about what will happen to them. You might wonder about their life type and how you will cover their expenses if they cannot work. Luckily, there are a few ways to ensure you secure their financial future. Let’s go over some of the top financial planning tips for special needs children.
Financial Planning Tips for Special Needs Children
Consider Long-Term Care Insurance
If your child needs specialized care at some point, you may want to look into long-term care insurance. As with other expensive requirements in one’s life, this type of policy can help save money on these costs later on. More attention is being given to long-term care as more people reach retirement age, and you may want to research it for your child. You can review a guide on whether long-term care insurance is worth it to help you decide.
Set Up a Trust
A trust will help you care for your special needs child, even after you are gone. You can put in your savings and gifts given to your child. You can also put in funds from insurance settlements. It will be secure, and many types of trusts do not change a child’s eligibility to receive benefits. You can still get one set up, even if there isn’t anything to put into it. That allows you to make the trust the beneficiary of your life insurance and your entire estate. This allows your child to receive your estate while still allowing them to receive federal benefits.
Appoint a Guardian
Having a guardian is critical, as it allows your child to receive care if you pass away. When naming a legal guardian for your child, consider how much time it takes to care for them and choose someone who can commit that amount of time. You may want to choose someone who has already bonded with them and has the patience to deal with the child. Ask if they can commit to this and ensure they understand it may last well beyond the child’s 18th birthday.
Have a Trustee
Having a trustee allows someone to be in charge of managing the trust if you pass away. This might be a friend, family member, or a professional trustee hired for the task. They will ensure the money is only spent on the child’s needs and does not fall into the wrong hands. You may want to have a separate trustee from a guardian. This allows you to have a series of balances, avoiding giving one person too much power over the money.
Financial Planning Tips for Special Needs Children
Worries about your child’s future might prevent you from sleeping at night but setting up a plan beyond simple money saving tips can mitigate some of your concerns, and while some of these steps might seem more straightforward, getting started on something can now give you peace of mind in later years. Remember that you don’t have to do everything at once.
