Although it is never a fun topic to discuss, it is imperative that parents of special needs children take excellent care to plan for their child’s financial future. Here are a few of the most critical steps to take to ensure stability and security for your child:
Implement A Special Needs Trust
This is the single most crucial step that you can take to secure the financial future of your special needs child. By setting up this trust right away, you can ensure that the assets of your child will always be protected from taxation laws as well as from the loss of significant federal benefits such as Medicaid.
Appoint A Guardian
Always one of the most sensitive issues to discuss, be sure to consider who has the time and emotional strength needed to take on this responsibility. After you choose the guardian, be sure that they understand that this commitment will likely last well beyond your child turning 18.
Appoint A Trustee
Unlike a legal guardian, the legal trustee has the authority over the special needs trust. Most experts advise picking a trustee separate from the legal guardian to ensure that there is a built-in system of checks and balances.
Knowledge Is Power
Make it your mission to educate family members about the challenges of planning for the financial future of a special needs child. It is especially important that people understand that financial contributions must be placed in the child’s trust and not in their own name so that the child will always remain protected from tax laws.
Save For Every Rainy Day
As any parent of a special needs child knows, you can never have too much money socked away. Make a conscious effort to save as much as possible so that you can continue to provide for any unexpected medical expenses, educational costs, therapies, and more. Don’t make the mistake of assuming that insurance or public schooling will cover all of these costs.
There is a lot of uncertainty when thinking about the future of a special needs child. This is why it is vitally important to plan for your child’s independence and how that might look many years down the road.