10 Steps to Plan for Your Child with Special Needs

Posted by Patty Manko on Fri, Oct 18, 2013 @ 09:22 AM


describe the imageAs friends worry out loud about how they'll pay for their kids' college education, the parents of children with special needs have worries that extend beyond the few years it takes to get a college degree:

  • How will we pay for the special therapies our child needs now?
  • Who will pay our child's expenses once he or she becomes an adult?
  • Where will our child live and who will oversee his or her care after we're gone?

 

These daunting questions and fears stop many parents in their tracks but creating a plan can ease anxiety. Some of the issues you need to confront are financial: How do you set aside money for your child without affecting his or her government benefits? And some are emotional: Who would understand your child's needs if something were to happen to you right now?

Here are 10 steps to planning your child's financial future. Some are simple, some are challenging; some cost nothing and some require paying legal fees. Get started on some of these now, so you'll have peace of mind down the road.


1. Create a Special Needs Trust

A special needs trust is the most important part of your child's long-term financial plan. This is where you can put money that you save, that others give your child as gifts, or that you receive from an insurance settlement without worrying that these funds will interfere with your child's eligibility for federal benefits like Medicaid and Supplemental Security Income (SSI).

Even if you're unable to pay into a trust right now, set one up anyway. This way, you can make the trust the beneficiary of your life insurance policy and your estate, ensuring that those assets don't get passed to your child when you die. Why wouldn't you want your child to be the beneficiary of your estate? Because showing more than $2,000 in assets could make your child ineligible for federal benefits such as SSI.Learn more about special needs trusts by clicking below.

Learn about Special Needs Trusts

2. Write a Will

A will specifies what will be done with your assets after your death. By writing a will, you make sure that your assets are left to the special needs trust and not to your child. Without a will, a probate court judge could name your child as a beneficiary, which could make your child ineligible for federal benefits (see above). The will is also where you can specify a guardian who will take care of your child.

When you have a child with special needs, a will should not be a do-it-yourself endeavor. Hire a lawyer who works specifically for people with special needs and is aware of your state's disability laws. Once the documents are drafted, have your lawyer keep one and then give copies to any executors or guardians named in the will.

Costs for this legal paperwork, including the will, trust, and powers of attorney, start at $1,500 and go higher depending on where you live. Contact the Academy of Special Needs Planners or the Special Needs Alliance for a referral to an attorney in your state.

3. Name a Guardian

A guardian is the person who will care for your child if you were to die before he or she becomes an adult. In choosing this person, consider how much time you now spend tending to your child's needs. Who can handle that type of commitment? Who has bonded with your child? Who has the patience, understanding, and other personality traits necessary to deal with the day-to-day responsibilities of raising your child?

Once you pick someone, ask the person if he or she can and will accept that responsibility (even though you hope it will never be necessary). And talk about how this commitment will likely stretch beyond when your child turns 18.

4. Name a Trustee

A trustee is the person who will be responsible for managing the special needs trust after your death. It can be a family member, a friend, or even a bank or lawyer. The trustee ensures that the money in the trust is spent only on your child with special needs and only on services that you've specified or that are appropriate to your child's needs. The trustee also supervises how the money in the trust is invested. The person who is caring for your son or daughter (the guardian) cannot spend any money in the trust without the trustee's approval.

And a word on trustees and guardians: They often are not the same person, and some financial advisors recommend that they never be the same person. By separating these roles, you ensure a "checks and balances" system for your child's future needs.

Duties of a Trustee

5. Build Your Savings

Parents of children with special needs quickly learn that just because a child needs a certain treatment or therapy doesn't mean that your school system will offer it or insurance will cover it. This is where personal savings become so important. Start putting aside whatever you can each month — no amount is too small — to cover these extra expenses. Just make sure you never put this money in your child's name.

Savings also can help pay for a special needs advocate, an expert in special education who can help you navigate the paperwork, programs, and laws that affect what services your child qualifies for. Special needs advocates can save parents money in the long run by using their expertise to ensure that kids get all the services they're entitled to from their local school district.

To find an advocate in your area, contact your local school district, organizations focused on your child's disability, or local colleges with special needs programs for a referral.

6. Write a Letter of Intent

Preparing for your child's financial future is important. But hand-in-hand with that is making sure that your child's everyday needs will be met should anything happen to you. That's where a Letter of Intent comes in. Is your child's daily routine very important? Write it down and be as detailed as possible. The same goes for your child's daily, weekly, and monthly schedules.

Create a list of contact information for your child's physicians, therapists, and other medical support people as well as current medications and their dosages and schedules. Are there people you don't want around your child or activities to be avoided? Write that down too.

And then once a year, update the letter. This is not a formal legal document, so you can draft it yourself. Keep a copy wherever you have copies of your will. And make sure that your child's appointed guardian has a copy too.

Download a template for your Letter of Intent

7. Plan for Your Child's Independence

When your child is about 16, start thinking about where he or she will live as an adult. In most states, people with special needs are 21 or 22 years old when they become ineligible for education services through the local public school system.

So start thinking: Will your child remain living with you? If so, will support personnel be needed during the day when he or she used to be at school? Are day programs for adults with special needs available in your area? If independent living is the goal, start investigating options in your community such as shared living, group homes, or apartments. Once you find a place you like, get on the waiting list if there is one.

Download our Exclusive Resource on Transition  and Residential Planning

8. Apply for Guardianship or Power of Attorney

Once children turn 18, they're considered adults in the eyes of the law. This gives your child the right to make medical and financial decisions. If he or she is not capable of this or needs your guidance, consider assuming legal guardianship or the less-restrictive power of attorney and health care proxy for his or her financial, legal, and health care affairs. This way you maintain the same supervision and control you had over these as you did when your daughter or son was younger.

Experts advise parents to hire an attorney to help with this process. This will ensure that you have all the powers you would need to assume control of your adult child's health care in the event of an emergency. If your child cannot or won't consent to you assuming power of attorney, the matter will likely be decided before a probate court judge.

9. Educate Family Members

Grandparents, aunts, uncles, and other loved ones might want to help out with expenses. But explain to them the importance of not putting anything in your child's name. Have a family meeting and explain why grandpa can't leave anything to your child in his will or name your child beneficiary on his life insurance policy. The same goes for gifts of savings bonds, stocks, or cash: nothing should ever be in your child's name.

And if your son or daughter will not attend college, there is no need for a 529 savings plan. Those funds can only be used for post-secondary education, not private schools, tutoring, or therapies needed before age 18.

If loved ones want to leave something to your child, they can. But tell them to name the special needs trust as the beneficiary to ensure that your child holds no assets of his or her own.

10. Need Help? Find an Advisor

If all of this is too overwhelming, as certified financial planners and  special needs financial planners, we can help. Ask your human resources department if your company offers this service as part of your benefits package. 

We have been there both personally and professionally. We can help.

 

Source:Kidshealth.org

Tags: Special Needs Financial Planning, Special Needs Trusts, Trustee Services

You've Been Appointed Trustee: What Now?

Posted by Patty Manko on Fri, Oct 11, 2013 @ 01:18 PM

trust resized 600Whether it's an honor or a burden (or both), you have been appointed trustee of a trust. What responsibilities have been thrust upon you? How can you successfully carry them out?

Here are some dos and don'ts to get you started:

1.  Do read the trust document. It sets out the rules under which you will operate. So you need to understand it completely.

2.  Do create a checking account for the trust. All income and expenses should go through this account. While you can and should invest the money, a checking account will enable you to make distributions and payments and keep track of them.

3.  Do keep the best interests of the beneficiaries in mind at all times. You have what's called a "fiduciary" duty to them, which is an extremely high standard.

4.  Don't have any personal financial dealings with the trust. For instance, you cannot borrow money from the trust or lend the trust money to anyone.

5.  Do provide the beneficiaries and anyone else indicated in the trust with an annual account of trust activity. This can be a copy of the checking and investment account statements or a more formal trust account prepared by an accountant or attorney.

6.  Do invest the trust funds prudently and productively. It is wise to get professional investment advice.

7.  Do keep in regular contact with the beneficiaries to understand their needs.

8.  Do be aware of any public benefits the beneficiaries may be receiving and make sure you do not jeopardize the beneficiaries' eligibility.

9.  Do file annual income tax returns for the trust.

10.  Don't fly solo. Get professional advice to make sure you are correctly fulfilling your role. Click on the image below to access the Fall 2013 calendar of upcoming free workshops.

Blog Source: Margolis & Bloom Law

describe the image

 

Contact us for further information.


 

 

 


Tags: Special Needs Trusts, Trustee Services

Financial Q & A: Special Needs Trust

Posted by Patty Manko on Tue, Aug 06, 2013 @ 05:36 PM

family in field illus resized 600The establishment of a special needs trust can provide a false sense of security that you are all set. 

The money that funds the trust will secure the resources for your loved one to be cared for.

What is a special needs trust?

A Special Needs Trust (SNT) is a legal document and a very important part of your child's long-term financial plan.

The trust may be used to hold money:

  • that you save
  • that others give your child as gifts
  • that you receive from an insurance settlement

Funds in the SNT will not interfere with your child's eligibility for federal benefits like Medicaid and Supplemental Security Income (SSI).

Who are the parties involved?

The individual who funds the trust is the Donor. The individual who benefits from the trust is the Beneficiary. The individual who oversees the trust is the Trustee

When should families fund the SNT ?

 In most circumstances the SNT is funded at the death of the parent(s) or primary care giver, rather than during their lifetime. The term used for a trust that is funded at the death of an individual is a Testamentary Trust.

Reasons for not funding the trust during a donor’s lifetime include:

  •  Once a trust is funded, the money can only be used to meet the  beneficiary’s supplemental needs. 
  •  A separate tax return must be filed.
  •  Taxes on any earnings must be paid by the trust. Income earned in  the trust is usually taxed at a higher tax rate than an individual rate.
  •  Once a trust is funded, it becomes irrevocable. This prevents you  from making any changes to the terms of the trust.
  •  Overall, there is no flexibility in your plan.

Although funding the trust may reduce flexibility, the following are some of the reasons why one may consider funding a SNT during the lifetime of the donor as a planning strategy:

  •  If an individual has more than enough money to meet his/her  personal needs and will not jeopardize their personal financial  security.
  •  Provides the donor with the comfort of knowing that there will be a  certain amount of money available for the beneficiary.
  •  Parents who have taxable estates and are implementing strategies to  reduce their estate tax liability.
  •  Grandparents or others are trying to reduce their taxable estate by  gifting to your child – the SNT protects the child’s eligibility for  government benefits.
  •  Money in the trust can provide some protection from creditors. 
  •  Money directly received by the child either through an inheritance  and/or a legal settlement which would otherwise disqualify them for  benefits. This would be a “payback” SNT.

Regardless of the timing decision for funding the trust, it is important to do whatever you can to makes sure there will be adequate money in the trust to provide for your child’s security. There are two steps:

  •  identify what the anticipated needs will be
  •  assess what steps you can realistically take to provide what is  necessary in light of your other financial requirements and goals.

How to be sure you are all set: 

Review this checklist carefully. It is very important! If you have any questions, please feel free to email Cynthia and John.

1. What is my vision of the legacy which I wish to leave my child (or other family member) with special needs?

 2. Have I established proper Wills & Trusts that transform my clear vision into an absolute future reality?
 
 3. Does my Executor/trix or Guardian have a Letter of Intent which outlines my wishes for the future care of this person?
4. Will this Letter of Intent be passed to others who may eventually care for my child, should s/he out-live my second caregiver?
 

5. Is the Trust endowed with enough money to assure that distributions will not consume their principal throughout the beneficiary's lifetime?

6. Have I insured that caregiving survivors are financially protected from the future expenses in the care of my loved one with special needs?
 
 So...are you all set? If you answered "No" to any question, your plan is not complete. We encourage you to seek the answers to all these questions.

Contact us

Tags: Special Needs Financial Planning, Special Needs Trusts, Letter of Intent, Life Insurance

Guardianship Considerations for Individuals with Disabilities

Posted by Patricia Manko on Thu, Jul 11, 2013 @ 01:47 PM

describe the imageGuardianship is a legal means of protecting children and  "incompetent adults" (in legal terms, adults who cannot take care of themselves, make decisions that are in their own best interest, or handle their assets due to a physical or mental disability). When the court determines that a person is incapable of handling either their personal or financial affairs a guardian will be appointed.

The subject of guardianship for an adult child with disabilities is of concern to most parents. Parents of children with severe disabilities often assume that they can continue to be their adult child's legal guardian during the child's entire life.

Although it may be obvious to a parent that a child does not have the capacity to make informed decisions, legally an adult is presumed competent unless otherwise determined to be incompetent after a competency proceeding. Once an individual reaches the age of 18, the parent is no longer the individual's legal guardian. Parents need to explore legal options available to protect their child from unscrupulous individuals who may exploit their child's inability to make informed choices.

Download a template for your Letter of Intent

Some things to know when considering guardianship:

a. A guardian of the person is responsible for monitoring the care of the person with disabilities to ensure that the individual is receiving proper care and supervision. The guardian is responsible for decisions regarding most medical care, education, and vocational issues.

b. A guardian of the estate or conservatorship should be considered for a person with disabilities who is unable to manage their finances and have income from sources other than benefit checks, or have other assets and/or property.

c. A guardianship may be limited to certain areas of decision making, such as decisions about medical treatment or medications in order to allow the individual to continue making their own decisions in all other areas.

d. A temporary guardian or conservator may be appointed in an emergency situation when certain decisions must be made immediately.

If an individual with a disability is capable of making some but not all decisions, one or more of the alternatives to guardianship discussed here should be considered. These alternatives to guardianship are listed from least restrictive to most restrictive:

1. A joint bank account can be created to prevent rash expenditures. Arrangements can be made with most banks for benefits checks, such as Social Security or SSI payments, to be sent directly to the bank for deposit. (Remember to keep this account balance below $2,000.)

2. A representative payee can be named to manage the funds of a person with a disability who receives benefits checks from Social Security, Railroad Retirement, or the Veterans Benefits Administration. Benefits checks are sent to the representative payee.

3. A durable power of attorney (POA) for property is a legal document that grants one person the legal authority to handle the financial affairs of another. Generally, the use of a POA should be used when the individual with disabilities has the capacity to make basic meaningful decisions and does not require full guardianship but may not be able to make complex financial decisions without support.

4. A durable POA for health care, also known as a health care proxy, should be considered for individuals who are presently capable of making decisions about their health care and wish to anticipate possibly future incompetence.

5. An appointment of advocate and authorization allows a person with a disability to designate an agent to advocate on his or her behalf with administrative agencies such as the state department of cognitive disability, the department of mental health services, or the department of medical assistance.

6. Trusts may be an appropriate alternative to appointment of guardian in some circumstances. A trust is a legal plan for placing funds and other assets in the control of a trustee for the benefit of an individual with a disability - or even for those with no known disability.

7. As mentioned previously, guardianship is an option for persons who, because of mental illness, developmental disability, or physical disability, lack sufficient understanding or capacity to make or communicate responsible decisions concerning their care and financial affairs. Guardians are approved and appointed by the court. Guardianships are also supervised by the court. The guardian provides a report on the status of the individual to the court annually.

In general, the guardian or conservator is responsible for handling the individual's financial resources, but is not personally financially responsible for them from his or her own resources.

This list of alternatives to guardianship is not exhaustive, but worth speaking with an attorney about. As with all legal decisions, we suggest you seek legal advice from an attorney who is knowledgeable in disability law in the individual's state of residence.

Contact us for  further information

Tags: Special Needs Financial Planning, Special Needs Trusts, guardianship, special needs Letter of Intent

Special Needs Trust Distributions and Trustee Fees

Posted by Patricia Manko on Thu, Jun 13, 2013 @ 01:19 PM


trustee distributions resized 600Distributions

Most special needs trusts give the trustee sole discretion to make distributions from the trust funds. There are specific guidelines to be followed in making distributions.  A general rule is that distributions should not be made directly to the beneficiary.  Instead checks should be made payable directly to the vendors when goods are purchased or to the providers when services are rendered.

Charging a trustee fee

Even if the trust does not contain any specific language about fees, the trustee has a right to be paid.  The trustee fee is a tax deduction for the trust and is taxable income to the trustee.  The following are some factors to consider in determining an appropriate fee:

  •  the amount of assets in the trust
  •  the complexity of the investments
  •  the beneficiary’s needs
  •  the services being performed 

There are two considerations used in determining a fee; the first is the number of hours worked, the second is the type of service provided. Activities such as paying bills and balancing the checkbook will be charged at one rate. More complicated tasks such as working on legal, investment, and tax matters would probably command a higher figure. This is especially important if the trustee has a financial or legal background. 

Time and billing records

The trustee should keep a written record of all the time spent on trust activities. Some trustees maintain a log book in which they write down the date, time spent, and nature of each service. If any personal funds are used for the trust, the trustee should keep receipts for reimbursement from the trust assets. Reimbursements should be made promptly. Plan to keep these records at least until the beneficiaries have approved your account. 

 Download a Trustee Time Log

Tags: Special Needs Financial Planning, Special Needs Trusts, Trustee Services

Special Needs Financial Planning featured in FPA paper

Posted by Patricia Manko on Fri, Apr 19, 2013 @ 12:59 AM

Key takeaway: While an SNT is necessary in almost all cases, there is much more to special-needs planning than creating a plan that includes an SNT. A letter of intent—the ideal starting point for the financial planner to inform the financial components within the planning process, and collaboration with mental health and legal professionals—will greatly enhance the effectiveness of the services the financial planner is able to provide special-needs clients.

describe the imageMost special-needs families are not properly planning for their children’s futures and the consequences are potentially catastrophic (Lauderdale et al. 2010). While planning for the future of special-needs loved ones has always been a necessity, it’s paramount today because of the higher incidence of diagnosed disabilities, longer life spans resulting from medical advancements, increasing long-term care costs, and the reduction of government support (Erickson and Lee 2008; Hoyt and Pollock 2003; Lauderdale and Huston 2012b; Nadworny and Haddad 2007; Saposnek, et al. 2005). 

Emotional and legal issues complicate creating an adequate comprehensive plan. Financial advisers can begin to address the concerns particular to each family by forming a team of legal and mental health professionals to work closely with families while preparing a suitable plan. Special needs trusts, or SNTs, remain vital to planning for disabled individuals to protect government benefits eligibility, manage assets, and provide care continuity when guardianship is deemed necessary (Stone 2006). For keeping the social and emotional consequences to a minimum, letters of intent are also valuable tools to help transition care providers with as little stress on the special-needs child as possible. 

Financial planners can increase their accessibility to special-needs families by preparing themselves to address the technical and emotional challenges through a holistic team approach.
While an SNT is necessary in almost all cases, there is much more to special-needs planning than creating a plan that includes an SNT. A letter of intent—the ideal starting point for the financial planner to inform the financial components within the planning process, and collaboration with mental health and legal professionals—will greatly enhance the effectiveness of the services the financial planner is able to provide special-needs clients. 

Though the financial plan for a special-needs family is an amplified form of a traditional plan, the team of professionals is necessary for addressing the social and emotional issues particular to each family. Addressing such concerns directly affects the ultimate form and adoption of the plan designed specifically for families with special-needs dependents.

Tags: Special Needs Trusts, special needs Letter of Intent

Financial Factors in Special Needs Planning

Posted by Patricia Manko on Thu, Feb 28, 2013 @ 03:09 PM

financial factors Starting at a very young age we are taught about the value of money. Throughout our lives we associate the value of money to our life experiences such as paying for our own college education, purchasing a car, buying a house, saving for our own children’s college and our ultimate retirement – in addition to the daily expenses of our desired lifestyle.

Your Family's Financial Values or Standards

It is important to talk about the value of money and what it means to you because you can pass these values on to future caretakers and other family members. How you feel about money can also have an impact upon what you can achieve for your child's future. It does not do any good if you do not share your values of money with others. If parents do not articulate their vision, their financial capacity to achieve their goals and their financial intentions, their vision for their child may not happen. It is important to express your values to your financial advisors, trustees, guardians, and legal advisors, but also to your other family members. These individuals most likely will be the ones to follow through on implementing the plan that you have for your child.

SNP PLANNING POINTER:

Take a moment to ask yourself – What does money mean to me? Then take time to share those values with your family –this can be expressed in your Letter of Intent.

 Download a template for your Letter of Intent

Bringing Family Members into Your Discussions

There are many ways to discuss your vision and your finances. It is often easiest to begin this process in a gradual manner and in an informal environment. Although it is important to have all family members in agreement, scheduling initial discussions in a formal meeting or large family setting is not always the best. We recommend speaking to one child at a time, to get their feelings about their willingness to help. This will give them the opportunity ti share ideas with you rather than you telling them what you hope will happen. Remember, caring for a family member with disabilities is a lifetime commitment that you do not want to force on anyone, yet it is important for them to know your intentions.

After everyone has had an opportunity ti discuss tghuer feelings and ideas un and informal way, you may wish to plan a discussion wuth everyone at once.  Since every family’s dynamics are unique, you will find the best way to communicate with your family. The following steps should help to move the communication process along smoothly:

  • Share your vision
  • Talk about the amount of money you plan to have available to support your vision. You do not have to reveal all of your financial matters. You can choose to only mention the financial aspects that pertain to the needs of the family member with a disability.
  • Determine the best person to take on each role. For example, who is the best with finances? That person may be a good trustee or trust advisor of a Special Needs Trust. Who is most involved in the day to day life of the child? That person may be a good guardian.
  • Ask family members if they feel able to perform their roles independently. If not,design your plan to give them resources to work with. For example, let them know that they could hire an investment advisor to help with the trust management or a social worker to help oversee supports.

In our combined 30-plus years of planning, one of the biggest obstacles that we have encountered is that people do not feel comfortable talking about how much money they have. Even professionals in the field of providing services to families, including government agency employees that serve families, do not feel comfortable talking about money or the specific costs of providing services to individuals with disabilities. 

SNP STORY:

Although Charles is receiving all the benefits that he is eligible for and living independently, we feel that it is not enough for him to simply have what the government provides. We supplement his expenses by about $1,000 a month. This gives him the sense of self-worth and control to be able to do what he likes rather than do what someone else wants him to do. He has schizophrenia and his sense of self-worth is most important to his ability to function in life. In working with our financial planner and our attorney, we made arrangements for our other son to provide this supplement to support Charles’ needs without jeopardizing his government benefits when we are no longer able to. 

-- Charles’ father

Sometimes parents feel that they must treat all of their children equally. They feel that their children expect it. However, in many cases children without disabilities are more than willing to forego any type of inheritance to guarantee security for their brother or sister with  a disability. They understand the financial realities and would rather make sure their brother or sister is taken care of and would not expect that everything is shared equally.

One of the first steps that is required for you to be able to achieve financial security for your child is to overcome the reluctance to discuss the issues of money. We all know it takes money to provide services, staff, housing expenses, employment supports, transportation, education, health care services and the like. We also know that the government does not have an endless supply of money to funed these services.

Maximize Eligibility for Government Benefits

With this in mind, families should plan to maximize eligibility for governmenaboutof what funds are available to your family member– both personally and publicly –how to secure them and how to allocate them. We will be posting a blog about public resources, which we call government factors,  within the next few weeks.

Understand Where You Are and Where You Would Like to Be

In order to maximize your own personal resources, you must first understand where you are financially. Do you have the money to do the things you and your family like to do today? Are you happy where you are financially? If not, what can you do to change things?

The next step is to know where you want to be. What lifestyle do you envision for you and your family, today and in the future? What do you consider retirement – is it when you stop working full time, when you stop working the hours that you currently work, or when you begin to work part time or pursue a hobby for income?  What do you want to do for your vacations, travel time, fun time, and the like?  How philanthropic do you want to be? Where do you envision living when you retire?  In what type of environment do you envision your child living ?  Do you envision him or her living totally independent from you or do you intend to always be involved in the daily activities of your child's life for as long as you are able to?

Create a Plan

The next step is to prepare an action plan to get you where you want to be financially. This is where having qualified advisors to guide you through the planning process can be most beneficial.

The key issue to consider in the financial factors is maximizing personal resources. This includes maximizing tax planning strategies – both income tax and estate tax planning. The proper use of financial products can also be a key factor to financial success. You should also incorporate your group employee benefits in the planning process.  These would include your group health, life and disability insurance coverage,retirement plans, stock option plans, stock purchase plans, flexible spending plans, etc..  Determine those that are currently available to you and your family as well as those available to your family upon your death and /or retirement.  You should also determine which employee benefits are transferable and/or portable upon  termination of your employment.  Adequately protecting your income and assets in the event of a premature death and/or disability of a parent is critical.

Any type of planning process, from planning a vacation to building a house, has a defined beginning and ending point. The traditional financial planning process involves identifying resources and listing specific goals that can be quantified. Some common examples of quantifiable goals might include paying cash for your next automobile, saving for four years of college tuition payments ,purchasing a second home for retirement, or generating a retirement income equal to 65%-75% of your pre-retirement income.

Planning for a family member with disabilities can be a much more challenging process. There is no defined beginning or ending point. Needs and abilities of the individual can change rapidly and will vary significantly over time. It is only natural for the family of a young child to want to have a concrete plan in place that provides adequate assets and resources for their child’s lifetime needs. Families must realize, however, that it may not be possible to predict accurately the long-term costs involved in providing supports for an individual over his/her lifetime.

Assumptions can be made of future expenses. We can fairly accurately determine the costs of a physical residence – a house or a condo – in a geographic area based on current market values. We can also estimate the costs of maintaining the physical residence. Often, however, we cannot always accurately determine the costs of supports until the needs are identified. Once the needs are somewhat identified, we can develop a range of the probable expenses necessary to provide these supports today and in the future. Before implementing a residential plan it is highly recommended that you work with an independent consultant to determine the level of supports required. You then need to develop a model that meets both your personal preferences and your financial abilities to maintain the model, both during your lifetime and upon your death.

So how do we determine how much money is needed? And how much is too much? Just as the educational needs of every child are unique, so are the long-term planning needs of every individual with special needs. Even two individuals with a similar medical and/or cognitive diagnosis, can have significantly different support requirements. With these varying requirements, costs will also vary. There is no clear answer; the bestwe can do is to maximize all resources and coordinate all of the Five Factors.That is why it is so important to have a comprehensive plan and to reevaluate it periodically.

Tags: Special Needs Financial Planning, Retirement Planning, Special Needs Trusts, five factors of financial planning, Letter of Intent, Trustee Services, guardianship, financial planning, wealth management, special needs Letter of Intent

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