What Is Special Needs Financial Planning?

Parents of special needs children have one question that always haunts them: “After us, what?” 

Their anxiety and distress are focused not just on the normal concerns of financial security for themselves as they get older. Still, it also encompasses the security of their special needs children beyond their lifetime. Additionally, they have to plan for their child’s current and future needs, besides their own. Another crucial aspect is ensuring that the funds that they have allocated for this remain secure and can be accessed when required. Parents may also have the added anxiety of providing for their other children who have education/medical and other expenses. 

Caring For Special Needs Children

Children with developmental, learning and communicative disorders are termed special needs children. This umbrella term covers a whole spectrum, ranging from a mild or borderline learning disability to profound disability. 

Their rate and pace of learning are different from what is termed “normal,” and based on the level of disability, most of them remain dependent on either their parents, siblings, or professionally appointed caregivers throughout their lives. 

However, they must be provided with the care and learning opportunities and taught all the life-skills that fall within their purview of ability. Most modern governments ensure that the rights of persons with disabilities are protected by law. 

In this article, we will focus on those special needs children who are dependent for their financial needs on their parents/guardians and are incapable of making independent financial decisions on their own. These children require protection from fraud and exploitation besides ensuring that they are treated with dignity and respect and awarded all the rights that they are entitled to.

Fraud, cheating, embezzlement, and exploitation need not always come from outsiders. Sometimes, it can be family members who take advantage of their disability to defraud them of their due. That is why it’s crucial to begin planning for their future as early as possible. 

Costs Involved In Caring For A Child With Special Needs

2019 studies conducted in America show that there are nearly 9 million families in the country who have the responsibility of caring for a child with special needs. It is estimated that the actual cost of raising a neuro-typical (or “normal”) child in America up to adulthood amounts to nearly $240,0000. In comparison, the costs can ramp up to between $1.2 and $2.4 million for a special needs child. Nearly 28% of families in the US who raise a special needs child are below the economic poverty line.

These costs include:

  • Testing and Diagnosis
  • Continuing treatments
  • Therapy
  • Medication
  • Counseling
  • Respite care
  • Caregiver 
  • Special diet (if required)
  • Special equipment and aids
  • Vocational training costs
  • Entertainment and recreation
  • Assistive devices
  • Modifications to home, learning and work environment

Financial Planning 

Federal and state governments provide several forms of assistance, but the burden is still quite high on parents. Many parents are unaware of all the programs that they can apply for. This is where a well-established, highly-reputed professional financial adviser in Boise, Idaho, can be of help.  

  1. Make Time For Planning: Schedule a certain amount of time per week for your financial planning. Parents of special needs children are usually strapped for time, ferrying kids to school, taking care of them, feeding, cleaning up, continuing therapy and medications at home, etc. But you need to take time out to sit down with a financial planner.
  2. Realistic assessment: Early intervention is not important just for therapeutic reasons – financial planning must also begin as soon as you realize that your child has a permanent disability. This helps you evaluate present and future costs, provide for inflation, possible earning potential of the special needs person, financial support from friends/family, etc. Invest in a good insurance plan that will support the child and give additional income apart from what you plan to allocate in your will. 
  3. Budgeting: Calculate current costs and then, with a margin for inflation, make a broad-brush estimate for the child’s lifetime. Take all the future costs into account and remember that if they’re profoundly disabled, they may be unable to manage their finances and will need professional help, which would also have associated costs.
  4. Create an Estate Plan: Set up a trust to ensure that your child continues to get financial support after your lifetime. You can create a trust that consists of persons who are mainly contemporary in age to your child, so there are greater chances of continuity. This plan is designed to preserve, manage, and allocate your assets after your death or in the event that you become incapacitated. The first task is to write a will, then name an executor. The will can contain details of your assets, including insurance, IRA, retirement plans, taxes, etc. It also contains names the beneficiaries of the will and the guardians of your special child, with precise details on how the funds are to be managed and allocated. This will give you immense peace of mind and ensure that all those involved have a clear idea about your intentions.
  5. Training and Skill Building: You must invest enough time, money, and effort on skilling your special child to their maximum potential abilities. Vocational training, life-skills and communications training, self-advocacy, and self-care are important abilities that help your special needs child to become self-aware, self-sufficient, and to avoid exploitation as much as possible.
  6. Plan For The Unexpected: As with everyone else, emergencies and unexpected events can happen in your special child’s life while you’re still around and after your lifetime. Make sure you put away a small corpus every month in a safe bank account that you don’t have to dip into at other times. This nest-egg will come in handy even when your special needs child wants a treat or a holiday or something to wear on a special occasion. Some types of medical expenses may not be covered by insurance, and your little fund could come in handy at such moments. 

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