Planning for your future financially is a challenge for everyone—but even more so for you if you are a parent of a child with special needs during this time. Many children with special needs are living longer, which puts you as a parent in a dangerous spot: who will take care of your child financially, physically and emotionally, long after you are gone? How do you prepare for your child with special needs’ future as the coronavirus COVID-19 pandemic gets worse?
It’s understandable why you haven’t completed the full list of tasks including establishing legal guardianship, power of attorney, and securing a residential placement since long-term care plans take time, are overwhelming, and cost money. However, the more information you have, the better off you are.
Saving money for the future needs of your child with a disability is solved with a special-needs trust, especially if you are worried about the coronavirus. You set up the trust with the help of an estate planner and designate it as the beneficiary for any assets you intend to leave for the benefit of your child. When set up properly, assets held in the trust for your child won’t affect his or her eligibility for certain government benefits. But these trusts should be set up early, before any potential inheritance from any family member kicks in and compromises the child’s benefits.
Another resource that you as a parent of a child with special needs has at your disposal is a 529 ABLE account. Similar to a 529 college-savings plan, these accounts allow tax-free distributions if the money is used to pay for qualified expenses. For ABLE accounts, these include housing, employment training, assistive technology, and personal support.
ABLE accounts can hold up to $100,000 in assets without hurting your child’s eligibility for government benefits. To qualify for an ABLE account, your child must have been disabled before his or her 26th birthday.
During your lifetime, it is common for you to start having medical costs that coincide with the health-related expenses of your child with special needs. Long-term care insurance can help cover these bills so you don’t have to spend your retirement money. Because, let’s face it: there’s going to come a point when someone will need to take care of you and your child. Especially now during the coronavirus pandemic, you should look into getting coverage before age 50, when you are still healthy enough to pass medical underwriting. While long-term care isn’t necessarily cheap—you can receive some tax advantages when you use the policies in combination with a health savings account.
If you feel overwhelmed and you need help, please contact us.
American Advocacy Group is on the front lines every day, making positive change happen for people diagnosed with autism, Down syndrome and a range of diagnoses across the continuum. As a leading advocate for all people with intellectual and developmental disabilities and their families, and the premier provider of the support and services people want and need, we understand the system and know how to take action in regard to your best interests.
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