Planning When You Have Special Needs Children

Originally published on Why Platinum?

Financial preparation is important for any family with children.  When one of the children is special needs, the needs is amplified.

What if the parent(s) or guardian are killed or incapacitated?

Will the new guardian be able to financially, emotionally, and legally be able to take care of the disabled child the same way their mother and / or father can?

Always a tough situation, there are steps that should be taken to minimize the devastation that will occur for the special needs child when their parent or guardian is gone.  The following information is by no means a complete description of what needs to be done for every family since needs and situations differ, but it can be a good guide on where to start and what to consider.

Please consult with legal council or insurance / financial professional where necessary.

Life Insurance: Buying life insurance is a great way to leave an income source to a dependent who needs support until they can support themselves.  With a child with special needs the inability to support themselves could stretch well into adulthood or even their lifetime.  

Realistically, how many years of income will be needed, and how much per year?  18 or 21 may not be the goal in this case.

Will Government support be enough?

Can the guardian you've chosen to help your child financial afford to take on that responsibility?  They might want to, but can they?

Life Insurance on the lives of the parents or guardians is a key step to take.

Other steps to consider:

• Create a last Will and Testament:  A will should outlines how you want your assets (estate) distributed. Have a lawyer guide you through the process. This is not the time to Do-It-Yourself. Leaving assets to a special needs child directly may jeopardize any government aid they receive such as Social Security, MediCare, or Medicaid / MediCal.  So make sure your attorney helps you figure out if you should designate someone to take care of the estate.  In these cases a Will is not enough.  See Trusts below.
  
  
  Don't NOT buy insurance out of the fear of losing government support.  Do it the right way instead.  Government support with current government budgetary problems could make future support unreliable.
  
  
• Decide on the right Guardian(s): Appoint a trusted and responsible adult to make financial & medical decisions for the special needs child.  You might need to choose a short term and a long term guardian.  Example: the grandparents might be the best choice, but for how long?
  
  While you might first look for a guardian that the child especially likes and would be comfortable with, make sure they're more than just emotionally capable of the responsibility.  Can they also handle the financial and medical decisions that need to me made?  A "general guardianship" gives someone the power to make decisions for the special needs person.
  
  Gives copies of these documents to that possible guardian, and sure that the guardians, other family members, and schools know of your choice so if something happens, the guardian can be notified immediately.
  
  The objective is to avoid any custody struggles, or eliminate the involvement of foster care.
  
• Write a Letter of Intent: Never assume people know what you want or remember what you said years ago. PUT IT IN WRITING.
  A Letter of Intent (Life Plan) is a document that describes how you want your child to be cared for and what you expect for the future. While not legally binding, it does give a guidance to a caregiver who will always wonders, "What would the parents have done in this situation?"  Save them from the doubt of, "Am I doing the right thing?"
  
• Appoint a Power of Attorney:  Appoint a power of attorney to make financial, medical, and lifestyle decisions for your special needs child. This minimizes "courts involvement" when it comes time to make decisions.
  
• Set up a Special Needs Trust: The parent can set up a trust and appoint a trustee to manage money and assets for your special needs child.  By not putting these assets in the child's name, their eligibility for government benefits is not jeopardized.
  
  Buying life insurance without a trust is inviting temptation, or opportunities for the child or guardian to be taken advantage of by others.  At a minimum, less chance of error being made with the money.  The trust will help manage the money and guide the guardian in spending the funds.  Consult with a legal consultant as to whether you can, or should, name the trust as the beneficiary of the life insurance policy.
  
• Build a Support Team Now:  If you haven't already, start building a team of trusted advisors (specialists) who are willing to provide guidance.  This team might include the chosen guardians, trusted doctor(s), financial professionals, estate planning attorney, clergy, and interested friends & family.  Make sure they know, and support, your plans and preferences now.

Life insurance is not the only step in this process, but it does act as the funding method to make the other steps financially possible. If managed properly, this money will pay for living & educational expenses, medical bills, and other requirements of the special needs child so the guardian can focus on being there for him or her.

The sources I used to help compile information for this blog included the following:

A website titled disabled-world.com

A blog titled Planning For Parents of Special Needs Children

In addition, here's a great article on other concerns for families with Disabled Children published on BabiesToday.com.   Does a Disabled Child Equal a Disabled Family?

"We Are Farmers!"

Consult with a Farmers Insurance Agent with the Platinum Elite Group to start the Life Insurance part of your overall plan to properly provide for and protect your family.

Platinum Elite Team:

Susanne Romo - Chula Vista & Kearny Mesa  (lic. #: 0720743) - (858) 751-0956

Araceli De La Torre - Kearny Mesa (lic. #: 0G17321) - (858) 751-0956

Tony Gutierrez - La Jolla (lic. #: 0A87116) - (858) 751-0956

Kevin Tuckey - Mission Valley (lic. #: 0B72553) - (858) 751-1357

Farmers Insurance Building,
San Diego, CA

The Platinum Elite Headquarters can be found in the Farmers Insurance Building at:

1011 Camino del Rio South
Suite 100
San Diego, CA  92108

Platinum Elite Headquarters can be reached at:

(619) 296-FARMERS
(619) 296-3276

Farmers Insurance & The Platinum Elite use an investigative and educational process to ascertain your current risk exposure and deliver to you through our 'Value Insurance Proposal' (VIP) the correct levels of coverage at the right price without compromising vital coverages. You need to protect your family and the assets you have spent a lifetime acquiring.

With Farmers Insurance, there is a difference.  Discover:

Why Platinum!

* The content of this blog is for informative purposes only. It does not reflect official standing of any agent, agency, or company mentioned on the blog. Nor is this blog necessarilly an endorsement. Please consult with your insurance, tax, or legal specialist before making any decisions. This blog is purely meant to spark the thought process.