Quick Links

Why a Special Needs Child Family Has To Hire a Financial Planner Today

Often financial planning takes a back seat for parents having children with special needs. The 24/7 care aligned with busy work schedule leaves less time to think about finances. Also, lack of enough advice and experts in this segment forces parents to seek advice which may not suit their unique requirements.

But financial planning is not a one-time affair. In fact much like a constant care of special needs child financial planning is an ongoing management of affairs of your finances. For special needs children families financial planning is a necessity not an option. There will be different phases of child life when often financial planning takes a back seat for parents having children with special needs. The 24/7 care aligned with busy work schedule leaves less time to think about finances. Parents will feel the need of sound advice to sail them through the life situations.

Here are 5 different life stages of the special needs when the need of experts like financial and estate planner arises. This reinforces the fact that financial planning has to be adopted early in life and as an ongoing affair

1. When The Disability Is Known

This is the time when special needs parents will go through many social and emotional issues as they discover the child disability. Unaware of what lies in future parents has very less time to think beyond child disability. But as the parents accepts and work towards the child future finances has to be managed well. There will be manifold increase in expenses due to special needs child care. The cost of therapies, schooling, support etc. has higher outgo especially living in metro cities. This badly hit parent’s savings capability if they are unaware of their cash flows. The corpus parents will require at various life stages like retirement or leave at their demise is much higher. Without starting early there will always be an uncertain environment on having the right funds to take care of the child and the rest of the family. How much funds is required, what money needs to be saved today, what emergencies can arise in future, how much corpus to leave for the child care- all these questions have to be answered.

2. When child turns 18

Along with social and financials legal issues will also arise. As the child turns 18 the natural guardianship of parents will come to an end. Parents will have to seek legal guardianship to continue managing affairs. The child also steps into adulthood and the life situation will change. There will be behavioral changes in the child which parents will have to address with change in education. But there will also be changes in finances which require attention. Parents might have to bring in different support. There may be additional expenses like house modification or even buying a new house to accommodate an adult child. Vocational courses, transportation, Medicare and many others expenses will have to be planned now. There will also be concern surrounding parents mind – what after us. This question will also have to be answered now and so a proper estate planning needs to be drawn. Formation of trust, writing a proper will, letter of intent and other legal documents will have to be written. Who will be the next guardian and where will the child live are questions parents should seek answer to.

3. When Parents Retire

Retirement for special needs parents is 2 folds- for them and for the child care after them. Here complete finances will have to be reviewed and see what have been arranged for the future. How the retirement expenses will be met, will the accumulated assets be enough to cover even the special needs child cost, Will the expenses allow them to continue or need relocation, will parents have to continue working to fund the shortfall if any, and who will manage the child affairs if they are incapacitated. Also, who will be the next legal guardian if not planned until now? All these question needs to be answered which are not easy.

4. At First Parent Death

At the death of the first parent the surviving parent will have to manage the affairs now. If surviving parent is working then he/she will have to rely on professionals. The going is tough for housewives as they may have not learnt managing affairs. Making any wrong financial decision at this stage of life is going to jeopardize child future. The legal issues will also come up since Will of the demise parent have to be executed. The assets will have to be transferred to surviving parent or the trust as written in the Will. The surviving parent will have to plan managing the assets to fund the child care. What after him or her, who will manage the affairs and who will own the complete assets are questions which have to be answered by surviving parent.

5. At Second Parent Death

The demise of second parent will bring a need to review all the aspect again. Since the complete control of the child care may rest on the trust or the legal guardian there will be change in the complete situation. The finances may rise again here now since the total care may rest completely on professionals. Also the asset distribution to the trust or total control to the legal guardian will be executed. Now the management of the assets by the trust will be a key factor. Whatever corpus is transferred to the trust will be the money left for the child care. The child movement to other cities or an institution may also come into place for certain families. Hence a complete review of the child requirement and the associated corpus will be essential.

Thus there are different stages in the life of a special needs child where parents will feel pressure to plan for the future. These pressure pints can be relieved only when these stages are planned ahead. To avoid making wrong decisions it’s important that a team including a financial planner and estate planner is created by the parents today.

Read more about financial planning in his book ‘Financial Planning for Families having Children with Special Needs’ in our “We Recommend”