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Planning for the Care of Special Needs Children as They Age

By Dana Ragiel

Over the past twenty years, I have had several opportunities to assist families who had developmentally disabled or physically challenged children.   In these cases, acting as a trusted family advisor becomes very personal as you are helping the family through a challenging time requiring critical decisions.  These decisions involve guardianships, monthly living expenditures, and medical costs, as well the potential creation of a special needs trust.  It is not simply a financial issue.  Other factors include who will care for the minor or adult child if the parents die first.  Identifying and preparing a guardian is imperative and part of the process.

I once advised the a family who had four healthy children, suddenly their 10 year old son was stricken by encephalitis and in a coma, which resulted in severe brain damage.  The family was devastated although relieved that he survived.   Initially, he was able to live at home but eventually as he grew to a young adult, he needed full time care.   Though heartbreaking, the parents needed to find the best facility to provide the daily care he required.  Thankfully, the family had the financial means to budget monthly funds required for a special needs facility.   

However, monthly costs are not the only critical issue.

A family meeting was conducted with my help to identify various residential living facilities available to a minor child who was a “teenager.”  We evaluated access to care, the living arrangements and compared living costs, as well as medical expenses.  I approached this as a financial and budgetary issue with the family.  Initially, these were the top priorities.  

Dedicated assets for special needs care.

For longer term planning, I introduced the idea of a special needs trust for the ongoing financial needs of their son, which would provide safety, continuity and dedicated assets for the son’s care, as well as oversight by a trustee in the event the parents were no longer able to act on his behalf.  As the family advisor, I worked with a trust and estate attorney who drafted the trust document but moreover, I worked closely with my firm’s portfolio management team to design an investment portfolio that would provide needed income as well as principal appreciation over time of the assets in the trust. As a teenager, their son could potentially live well into his sixties, requiring a long-term plan for covering the associated costs.

The next critical issue was assignment of a guardian.  

While my clients were in good health and would likely outlive their son, there was the possibility that would not be the case.  Decisions had to made as to the role and responsibility of his siblings for the disabled son’s care.   I spearheaded a family meeting to discuss the succession plan for guardianship.  This discussion was held prior to an update of the couple’s estate plan.    

The family was fortunate to have three involved siblings but again this needed to be included and clearly stated in the  estate plan.   I worked with their family attorney as well as their accountant.  With my insurance experience, we discussed the need for insurance coverage as part of the overall financial plan, which would benefit their son directly in the event of their deaths.

Another critical consideration is social security, which covers intellectually, mentally and physically disabled individuals.    There are specific issues surrounding social security and special needs trusts.    While benefits for the disabled aren’t large enough to be life-changing, depending on the situation and family resources, every little bit can help.

The son ended up succumbing to a severe seizure at age 26.  While some of the planning could be viewed as not being needed, there was no way to know at the beginning of the process that would be the case.  The planning work provided great peace of mind to the family, knowing that care for the young man would be in place, no matter how life unfolded.

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