Raising any child requires the wisdom of Solomon, the patience of Job, boundless energy, an unsinkable sense of humor, and lots of unconditional love. Even so, its impossible to keep it all in balance sometimes. When youre the parent of a physically, mentally, or emotionally challenged child, these basic requirements become further complicated by visits to specialists, therapy, medication, special schooling, and sometimes, constant care. What you need is more time and energy. What you dont need are more "should dos" in your already busy life. So while you know you "should" plan for your special childs future financial needs--as well as for your own--it may be something you put aside for another time. The good news is that it need not be time consuming or difficult to create the long-range financial strategy youve been putting off. With the right people in place to help you, it's possible to work out a program that helps to protect your whole family, including your child with special needs. Who are the "right people"? Two essential professionals are an estate planning attorney (preferably one who has worked with families of children with special needs) and your insurance professional. The attorney will serve as your guide through the maze of legal decisions about wills, trusts, and guardianships youll need to make. And he or she can create an estate plan, which your insurance professional can fund, that may help avoid the traps that can unwittingly nullify your best intentions. Your insurance professional can help with the purchase of appropriate insurance products to protect your family against loss of income due to death or disability, and products to begin building a nest egg for future education, care for your child with special needs, and your retirement needs. Here are the areas youll want to cover with both professionals to be sure that your needs, and those of your special child, are adequately addressed. 1. Family protection: If a breadwinning spouse dies or becomes disabled there is not only loss of income for the family, there is also a loss of the parents care for the child with special needs. Extra funds will be needed to keep the family going. 2. Mortgage protection: Being forced to move after the death of a parent may be more than a hardship: it may be difficult to find substitute housing with the proper requirements (ramps or wide doorways, for instance) for a child with special needs. The purchase of life or disability income insurance can provide funds to pay your mortgage should the unexpected occur. 3. Education funding: Children with special needs who can attend school may incur additional expenses for transportation, personal care, and customized learning materials (Braille books or specially designed computers). A college savings plan can help provide for all children who wish to pursue higher education. 4. Retirement funding: Preparing for retirement is critically important. With an adequate income later on, youll be in a better position to help your child with special needs when he or she reaches adulthood. Beginning funding for your retirement now can help you to save a little for longer. 5. Wills and trusts: Above all, the child with special needs must be provided for while other children in the family are treated fairly. Yet an outright legacy to the special child may be undesirable because it may disqualify him or her from government assistance. A qualified estate planning attorney can help determine if Trusts can be used to provide additional protection, especially if one of the trustees is an institutional trustee appointed to manage funds while siblings (or others of your choice) oversee the childs general care. Trusts also offer parents more flexibility and privacy concerning the details of a childs care. So youll want to think through all the issues carefully and get advice from the attorney. Depending on your individual circumstances, your attorney may recommend establishing a Special Needs Trust that provides sufficient assets for your childs care while still maintaining his or her eligibility for Supplemental Security Income benefits from Social Security, Medicaid and other programs. Youll also need to decide whether the trust should be revocable or irrevocable. If a Trust is appropriate, you may wish to consider funding it with life insurance. This may allow you to leave a larger amount to the disabled child without having a negative impact on your own retirement nest egg. Again, your attorney can review the various options available to you and help you prepare the legal documentation that your unique situation requires. They may also recommend that you write a detailed Letter of Intent outlining your desires for the care of your disabled child. Along with the standard legal documents, this letter becomes a helpful guide for future trustees, conservators, and the courts should there ever be any question as to what you really wanted. 6. Guardianships: Children with special needs who are not fully capable of managing their own affairs should have a guardian and/or conservator with appropriate powers of attorney. Yet care must be taken to choose a guardian who is willing to take on the extra burdens, possible disruptions, and legal requirements involved. For the more severely disabled child, the need for guardianship may continue even after the child reaches adulthood (majority), so the responsibility becomes a lifelong commitment. Calling on the assistance of the insurance and legal professionals who are knowledgeable about working with the parents of children with special needs is an important step towards helping to assure that you and your family are well positioned for the future. And it lets you scratch off one more nagging "should do" from that long, full list. The opinions expressed in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you consult your representative, attorney, or accountant with regard to your individual situation. L0301G84F(exp1207)ENT-LD This article/column appears courtesy of Cristina Callegari. Crisitna is a Registered Representative offering securities through MetLife affiliated broker/dealers including Metropolitan Life Insurance Company (member NASD) or MetLife Securities, Inc. (member NASD/SIPC). Insurance and annuities offered through Metropolitan Life Insurance Company.She focuses on meeting the individual insurance and financial services needs of people from the New York Metropolitan area. You can reach Cristina at the office at Metropolis Financial Group, 1979 Marcus Avenue, Suite 234, Lake Success, NY 11040, 516-326-7041. |
