What is a comprehensive financial plan, anyway? It is a plan that examines all financial aspects of a person’s life: savings, investments, retirement, taxes, public assistance, medical, insurance, etc., and organizes these aspects in such a way that best meets the person’s goals and objectives. As challenging as it is for most Americans to undertake this task, it is multiple times more complex for special needs families. The comprehensive financial plan for special needs families considers providing for two generations: the parents and family’s financial security as well as the needs of the individual with disabilities. From my personal experience, there is a tremendous and immediate payoff for families who undertake this effort in terms of overall peace of mind and security. Knowing about this benefit will help you overcome the challenges in establishing a comprehensive financial plan.
Just make a start
There are many impediments to establishing a comprehensive financial plan for special needs families. Not knowing exactly what your child’s future abilities and expenses are going to be is just one of the unknowns. Additional variables include your child’s life expectancy, your future earning and savings potential, and the degree that public assistance (e.g. Social Security and Medicaid) will be available. Each of these factors is interrelated, which adds complexity to your planning. For example, your child’s ability to live independently will impact his or hers future personal living expenses but also lessen his or her need for public assistance.
On top of all these uncertainties there are the daily pressures families face in caring and providing for their child, which makes it is easy to understand why many give up or postpone this essential task. (One sobering statistic: 88% of parents who have children with special needs have not set up a special needs trust for their child.) Don’t allow yourself to get fooled into thinking that all the pieces have to come together before you’re able to establish a plan. You will be updating your plan many times as you learn more and get better information about the future. Also, don’t get lulled into a false sense of security by expecting that somehow the government will provide for child in the future. With increasing pressures on state and federal budgets, it is best to plan conservatively when considering government assistance.
Make it comprehensive
Since the many financial aspects of your plan are interrelated, it is only of limited value to look at them in isolation from one another. For example, establishing a special needs trust may address one important aspect of your plan, but the way trusts are set up also impacts the individual’s eligibility for public assistance. Therefore, a comprehensive plan addresses not only the future living expenses of the person with disabilities but also their likelihood of receiving public assistance. It considers the goals of the whole family, not just those of the child with a disability. Plans for the parents’ retirement are made while taking into account the child’s projected living expenses at the same time. The need for updating the plan as your goals change or more information becomes available about each of the factors mentioned above should be an important component of every comprehensive plan as well.
Gather a Team of Experts
Because of the multiple factors and considerations that come into play in establishing your comprehensive financial plan, you will want to gather a team of advisors for input into your plan. Some advisors to consider as team members:
- Estate planning attorney
- Medical or behavior specialist
- Government benefits specialist
- Certified financial planner
- Trusted family member or friend
Get free advice where you can by interacting with peers, being involved with a disability group and reading journals and books addressing special needs planning[i]. It is likely, however that you will incur some costs in obtaining the advice of professionals. Since public assistance will be needed by most individuals with disabilities, it is critical that your professional have a detailed understanding of the rules regarding Medicaid and Social Security for folks with disabilities.
Developing a comprehensive financial plan for a special needs family is a complex task that requires a lot of personal time and effort. The benefit of such a plan: peace of mind and sense of security, make this initial investment a worthy and worthwhile endeavor.
[i] One excellent resource: “The Special Needs Planning Guide: How to Prepare for Every Stage of Your Child’s Life” by John W. Nadworny and Cynthia R. Haddad
Leave a Reply