Long term financial and family planning for a special needs child and traditional planning will overlap in many ways. The basic goals of maximizing income, passing assets and wealth to your heirs and protecting those assets in the process are very much in sync with most types of financial planning. Special needs planning can have a limitless array of variables depending on one’s own particular situation, and 300 page books on this subject alone have been written, but if I could highlight the major points of developing a plan for a child with special needs, it would boil down to this:
- You should draft a Letter of Guidance that will direct your child’s caregiver as to how you wish for your child to be cared for, protected and loved when you are no longer able to provide that care yourself. If you would like an outline of a Letter of Guidance, give us a call at 615-376-8899 and we will send one to you. Or email me at rick@DixonAdvisoryGroup.com and I will email a draft to you free of charge.
- You want to take advantage of all government (Federal, State, Local) programs that are available. We have a list of websites and other resources that provide government and other forms of public assistance. Email rick@DixonAdvisoryGroup.com and we will send it to you.
- You want to make sure you don’t “disinherit” your child from available programs with too many assets in your child’s name.
- You should have a Special Needs Trust, drafted by a qualified attorney, in place to provide for the proper disposition of assets for your child’s benefit. A trust is only actionable if it has assets, so you must have sufficient assets to fund the trust and help ensure your child’s future care. This can be accomplished in several ways. Of course if you have large retirement accounts or other savings or assets, these can be used to fund a special needs trust. For many, a highly efficient way to fund a trust, one that is income tax-free and guaranteed to be there when it is needed most is a life insurance policy.
The best time to start the planning process is today. Time might be on your side for now, but this won’t last for long. The cost of planning in advance is minor when compared to having no plan at all.