Estate and legacy planning present a multitude of challenges when consulting with a family with a special needs child. It is estimated there are approximately 6 million children under the age of 14 who receive some type of special education or participate in specialized programs. According to the “Disability and American Families” US Census Bureau report, one in every 26 American families reported raising children with disabilities.
Examples of special needs treatments and conditions include speech therapy, physical therapy, occupational therapy, behavioral therapy, severe learning and/or cognitive disabilities, treatment for physical or chronic disabilities, Autism Spectrum Disorder, Down syndrome, or other developmental disabilities. The planning for a possible disability event with a special needs child is especially important due to the family’s lifestyle adjustments. How will parents be able to pay for the children’s education and future care for a special needs child if there is a disability event? Moreover, will families be able to find and fund education in private schools in jacksonville fl, or nearby places that can accommodate children with special needs?
The need for specialized training in working with special needs families have been recognized by the American College. It provides a specialized designation known as a Chartered Special Needs Consultant – ChSNC. There are also programs designed specifically for special needs families by insurance carriers to assist in educating their advisors about the special needs environment and streamlining the planning process.
What kind or type of insurance can provide for future education needs or maintenance for a special needs child? The most common solution is life insurance. This is a time tested solution, but income protection designed to provide additional benefits to pay for children’s education and/or special needs can provide an additional solution should there be a disability event. A child’s education and future opportunities should not be limited by an income loss due to a disability. There is peace of mind knowing that in the event of a disability, the future financial maintenance expenses of a special needs child are protected. These funds can also be made available to any other children’s education needs.
Another potential issue in working with the parents of a special needs child is their mindset. Parenting a special needs child brings physical fatigue, stress, anger, loneliness, guilt, rejection, confusion and continuous anxiety as well as pride and joy. The additional stress also can have a negative impact on caregivers in regard to the well-being of their marriage.
A divorce involving a special needs child creates additional planning challenges. It is imperative to protect alimony and child support payments if a disability should occur to the ex-spouse as these support payments may be terminated. It’s crucial to research into spousal support in Texas, or spousal support wherever you are based, to be informed on what you and your child are legally entitled to after a divorce. The fact that the alimony and child support is most likely the only income available, a disability to the ex-spouse could be devastating. If the alimony and child support payments stopped due to the inability of the ex-spouse to make these payments, the financial and future well-being of the special needs child is threatened. This coverage is available in addition to the special payments for education and maintenance and also not subject to traditional issue and participation limits. Disability payments should be paid directly to the family receiving alimony and child support. If you find yourself in a divorce and are thinking about this, you may want to get in touch with a divorce and family law firm similar to peters and may who may be able to help you ensure that alimony and child support payments are protected.
A caregiver is likely to spend more than 40 hours per week providing care. It is estimated that in over 50 percent of these families, a spouse or other family member was forced to quit a job to care for the child with special needs. Family life dynamics change as they dedicate their life and family resources to that child’s well-being. Some caregivers may have to choose a part-time position to allow the time to provide specialized care. This of course has a serious impact on finances. There are many hidden financial costs of parenting a child with special needs. Families tend to experience three types of expenses: higher routine care costs, higher health care costs and reduced employment income. In some cases, there is an additional cost of renovating a bedroom, bathroom and/or entry way. Purchasing a wheel chair van for transportation may also be necessary. Also consider that there are may be additional costs associated with a special needs child with the amount dependent upon the level of care required and resources available.
In severe cases, there are special schools and institutions that help children learn to interact with others, communicate their desires and needs to others, and learn life skills. These schools and institutions have qualified special education teachers who are trained in behavior management, educational assessment and intervention, and successful strategies for the classroom. The need for special education teachers is growing because advances in the field allow for earlier diagnosis of learning disabilities, which means more children are receiving a diagnosis. The high cost of educating students with special needs is falling on traditional public schools, while other students are increasingly opting for alternatives. In addition to special education in the public school systems, there are over 140 special schools catering for particular types of special needs and disability. There are schools for the special needs children who have mild to moderate learning disabilities, for the visually and hearing impaired, and for those with physical disabilities. There are also a small number of schools for the emotionally disturbed.
The family dream is to provide the opportunity of higher education for all their children and to be able to provide some financial assistance for their children to attend college, but parents of a special needs child are consumed by unanswered questions: What will happen to my special needs child when he is 5 years old? 10 years old? An adult? Will college be available? Will he or she have a loving relationship? What is going to happen?
Many parents are also simply terrified about finances. Although families may receive financial assistance through government or private programs, the parents still face an incredible resource burden, especially in an era where government budget cuts are prevalent.
Group long term disability is a common source of income protection for many families. Group long term disability coverage can vary from low to high quality and may provide inadequate monthly benefit amounts. An individual income protection policy can provide additional protection. However, this combination is most likely not adequate for protecting the family with a special needs child. Normal issue and participation limits hamper adequate income protection planning.
There are solutions to solve these complex issues in the case of a disability. With additional income protection planning, additional benefits can supplement existing disability coverage to provide the extra money needed to cover the additional costs associated with a special needs child.
Documented expenses for day care, private school, college and education, and maintenance expenses for a special needs child can be covered to provide the extra money to continue these valuable services. The coverage can be designed to provide monthly benefits and then transition to a lump sum payment. The lump sum payment is deposited into an irrevocable education and maintenance trust. The trust agreement needs to identify specific provisions. For example, it should provide provisions for distribution upon the child’s death, completion of education, or failure to attend college or complete education. In the situation of a special needs child, the trust should have provisions to protect the assets of the trust for the benefit of the recipient.
The elimination period and benefit period can be adjusted to provide income protection that matches the specific needs of the family and special needs child.
A case sample: a parent with a child who has cerebral palsy became disabled and was no longer able to pay for immediate therapy and treatments needed for the child. Following a 90 day elimination period, a monthly benefit of $2,500 was available to care for the immediate costs related to the illness. After 9 months, the policy provided a lump sum benefit of $500,000 that was deposited into an irrevocable education and maintenance trust for the future benefit of the special needs child. This additional money allowed the child to continue these much needed treatments and provide for future care, treatment, and maintenance. This benefit is in addition to any other disability benefits payable.
Estate and legacy planning involving a special needs child provides a challenging environment for all concerned. A forward thinking planning approach can provide peace of mind regardless of a death or a disability. There is nothing more rewarding.
