10 Steps To Special Needs Planning For Families Of Individuals With Disabilities

Special needs planning focuses not only upon issues of the head but also issues of the heart. The first question parents ask is always "How much should we save?" There is no easy answer to that question. It depends upon many different things: What are your assets? How much are your debts? How much do you spend? How long will you live? How long will your child live? How much will care cost? How much will be left? What if you spend it all? Who will manage what is left?

The following are ten basic steps which help a family put lifelong benefits in place for a loved one with disabilities.

STEP ONE: DECIDE WHAT YOU WANT FOR THE FUTURE.

• What kind of residential environment will your child need?
• What will their educational needs be?
• Will they be capable of employment? If so, what will they be able to do?
• What kind of social life does your child have and how can you ensure that it will be maintained?
• What is the religious environment you wish maintained for your child and what special traditions are attached?
• What kind of medical care will be needed and how will it be continued?
• Have you made final arrangements for yourselves and your child?
• Have you decided upon an advocate or guardian to look after your child?

STEP TWO: WRITE DOWN INFORMATION ABOUT YOUR CHILD.

STEP ONE is important, but completing it will not do much good if the information stays only in the parents' heads. It needs to be written down, but parents seem to have a hard time starting this process.

STEP THREE: CHOOSE AN ADVOCATE OR GUARDIAN.

This is the person who will make sure your wishes will be carried out. And this is the step that stops most planning from moving forward.

When children are still young, backup guardians should be designated in your will, just in case something were to happen to you.

Once your child is older, parents need to decide if it is necessary and appropriate to become the child's legal guardian. After the child attains the age of majority  parents have no legal authority to make legal or medical decisions for their child, including those having to do with residential, medical, school or work.

Guardianship may be the answer, but there are also other alternatives available such as limited guardianship, powers of attorney or reliance upon other state statutes that may exist.

This is a very important, yet very challenging step. Our parents tell us how difficult it is to make the right selection, and they find they are changing backup guardians several times because of circumstances which change or because they realize that the person(s) they selected either cannot or should not be the guardian. In the words of one family, "Guardianship issues are never really finished." 

STEP FOUR: DETERMINE THE REALISTIC COST OF YOUR PLAN

Many individuals with special needs receive government benefits, but you as a family must plan in a way which allows for the possibility that Social Security benefits and other funding might not be there. If it is, it can help fund room and board, care and supervision, medical care, employment and basic personal needs. Funding is currently available through a combination of SSI and Medicaid; or the funding might even be a combination of SSI, SSDI, Medicare and Medicaid.

Your plan must allow for the other personal needs not covered by government programs. For example, you may need to help fund the assistance of an advocate or guardian to look after your loved one's best interests.

There may be additional medical and dental care needed. There may need to be funds for vacations with relatives or gifts for special occasions. And there will always be items to boost your loved one's self esteem. These personal needs can be funded through the use of a Special Needs Trust.

STEP FIVE: SELECT A COMBINATION OF RESOURCES WHICH WILL HELP PROVIDE ADEQUATE FUNDS FOR THE PERSON'S LIFETIME.

Government benefits may or may not be available, so you need to expand your horizons in looking at funding your child's life for the next fifty years.

Savings accounts and investments can benefit your child, but there are very specific limitations as to how much money can be in your child's name. Any amount of money over this limit could cause the loss of benefits to which your child may be entitled. Special needs planners know the appropriate ways to set up accounts to protect funding.

Insurance can be an affordable and reliable option but must also be initiated in a specific way to protect funding.

Family members often want to help and they think giving a monetary gift or making your child the beneficiary of an inheritance is a good thing. It is not! You must instruct them in the appropriate ways to contribute so that your child will not lose important benefits.

STEP SIX: FIND A QUALIFIED SPECIAL NEEDS ATTORNEY TO PREPARE CAREFULLY WORDED LAST WILLS AND TESTAMENTS.

There are an increasing number of attorneys skilled in special needs planning, but it is a field requiring unique knowledge and a family should exercise care in selecting an attorney. Special needs organizations in your area should be able to provide names of competent attorneys. 

STEP SEVEN: ESTABLISH A SPECIAL NEEDS TRUST TO MANAGE THE RESOURCES YOU HAVE SO CAREFULLY PUT INTO PLACE.

Attorneys skilled in special needs planning are very familiar with the establishment and maintenance of a Special Needs Trust. The Trust is needed to protect the government benefits, provide for the supplementary needs and assure the quality of life you have chosen for your loved one.

In accordance with specific state court decisions and statutes, inheritances and gifts can be left to Discretionary Supplemental or Special Needs Trusts. The assets and income of the trusts do not interfere with or jeopardize your child's SSI or Medicaid.

Special Needs Trust assets do not belong to the individual with disabilities and the assets are not in the name of the individual. The trustee has sole absolute discretion in disbursing funds only for supplemental needs.

STEP EIGHT: PLACE ALL ESTATE PLANNING ITEMS IN A BINDER IN A SPECIFIC LOCATION AND BE SURE THE APPOINTED ADVOCATE OR GUARDIAN KNOWS WHERE TO FIND THEM.

These materials could easily be kept in the binder which holds all materials or some type of binder with pockets. What all should be included? Decisions about the future, instruction to the guardian, list of resources and their locations, name of the special needs attorney and how to locate him/her, last wills and testaments, Special Needs Trust, final arrangements, the financial plan and names of important contacts.

STEP NINE: HOLD A FAMILY MEETING WITH ALL FAMILY MEMBERS, FRIENDS AND GUARDIANS TO REVIEW YOUR PLAN.

We find that many parents assume that the siblings understand everything. Yet this is absolutely not always the case.

Take great care in educating other family members about the things you DO want and DON'T want for your child. Be sure they understand proper gifting for the benefit of your child so they will not be the cause of lost benefits.

Give copies of relevant documents to those at the meeting and let them know where you keep the binder with all the documents.

STEP TEN: REVIEW AND UPDATE YOUR PLAN AT LEAST ONCE A YEAR.

Circumstances change. People change. Revisit your planning arrangements to see if they accommodate the changes and if not, revise and update your plan to reflect any changes. Take time to update your written instructions and review your financial goals. See that your attorney modifies documents as needed.

Article by: Mary Anne Ehlert, CFP