Estate Planning Challenges for Parents of Special Needs Kids

Usually, estate and financial planning typically have three major phases. The first phase is when the children are small. Concerns most parents have at this stage center around a catastrophic death in which minor children are left behind. In this case, planning for guardians and trusts for children are critical concerns. The second phase is when the children are grown and no longer dependent upon the parents. An inheritance then becomes a very nice addition to the children’s estates, but is no longer critical. The third phase is when the parents’ estate is large enough that estate taxes would be imposed, and tax planning is in order.

With a special needs child, however, estate and financial planning are very different. Very often, a disabled child will be dependent upon the parents or a caretaker/guardian throughout their lives. The stage where special needs children might become independent is either delayed significantly, or will never happen. As such, the concerns parents without special needs kids have are extended for parents with children who have special needs.

The lives of people with disabilities as well as their financial and lifestyle options have undergone many changes over the last 25 years. Less than a generation ago, a disabled person really only had two choices: he or she could live at home with family members assuming the responsibility for caretaking, or be placed in an institutional setting. A generation of advocacy and hard work by parents and others who work with disabled people has provided more lifestyle choice. Persistent parents have given special needs kids the ability to free and appropriate public education, and resources for care and increased independence.

Like most other things, however, proper care over the lifetime of a disabled person does not happen by accident. Only through proper planning can parents assure financial stability and proper caretaking for their children as well as caring for themselves. The reality today for families with disabled children are an increasing population of people with disabilities, which brings with it increased demand for services. Disabled people, like all of us, are living longer lives, and are faced with increased costs of long-term care, coupled with shrinking government resources. Parents simply cannot assume that their child’s siblings will desire or be capable of providing care for the lifetime of their brother or sister. Consequently, undertaking planning at the earliest stage possible is critical.

Although there are numerous resources available to parents of special needs children, putting a comprehensive plan together can be a difficult job. A plan that includes all of the vital aspects of planning for the care for the child, planning for the financial security of both the parent and child, planning for special needs trusts and other forms of estate planning can be much simpler and understandable with help from a special needs planner.