While having a special needs child is by no means easy, for many this diagnosis does not feature the grim outlook it did in the past (thankfully). Given advances in medical technology, many special needs children now go on to live long and fulfilling lives.

Unfortunately, however, corresponding costs are often steep. For example, the average lifetime cost of care for an autistic child is estimated to fall anywhere between $1.4 and $2.4 million: depending on whether or not an intellectual disability is also present. To add further context to these numbers, a recent Brookings Institution study reports the average estimated cost of raising a child in the absence of special needs (from birth to age 17) is $310,000. While college tuition can add anywhere between an average of $10,423 and $39,723 per year, the overall financial obligation is still considerably less than costs required to raise an autistic child.

If you have a special needs child, planning for his or her financial future is often daunting. However, it is possible to ensure a stable life for you and your children. The key is a well-executed financial game plan.

Enlist the help of a financial advisor to plan for your special needs child

It’s important to collaborate with a specialized financial advisor as early as possible. Planning for your child's long-term care is of course an emotional experience, with many factors to consider: including the means for their survival if and when they outlive you. A financial advisor can help provide the clarity and guidance you need to feel confident when making corresponding decisions.

Evaluate available government assistance programs

Your advisor may start by pointing you towards public programs that serve families with special needs children.

For example, every state is required to offer a free or reduced-cost early intervention program to help developmentally challenged kids. This first step can give your child the best chance at living a “normal” life with minimal assistance.

Beyond this, the Individuals with Disabilities Education Act (IDEA) makes available “free and appropriate public education” to eligible children until they graduate from high school or reach a specific age (rules vary by state). The public school system must also pay for private services if unable to provide the special education a child requires—while familiarizing families with educational opportunities available after high school.

For children with special needs, medical expenses can quickly pile up. Find out whether they qualify for public health insurance through Medicaid. This government program offers a benefits package that includes long-term care and can even be used to supplement private insurance.

Families whose income is modest but too high to qualify for Medicaid (and too low to qualify for private health insurance) may be eligible for the Children’s Health Insurance Program (CHIP). CHIP typically covers various services including hospital care, doctors’ visits, dental and vision care, prescriptions, and emergency services.

To help with non-medical expenses such as food, clothing, and shelter, the Social Security Administration offers Supplemental Security Income (SSI) for disabled children under 18 who have income and resources that fall below specific financial limits.

ABLE (“Achieving a Better Life Experience”) accounts—also referred to as “529A savings plans”—are state-run, tax-advantaged savings accounts used to pay for qualifying disability-related expenses including education, housing, transportation, assistive technology, employment training and support, financial management, and health care expenses. Disabled individuals can open these accounts at any time before the age of 26.

Consider a special needs trust account

You may also want to evaluate the need for a special needs trust. For those unaware, a trust is simply a financial account (e.g. a bank account) opened by you and managed by a designated trustee: often a trusted family member or friend or “pooled” (wherein a nonprofit acts as the trustee).

One benefit of a well-structured trust is that it allows children with special needs to use the assets—such as money and property—within the trust without losing any benefits associated with any government programs. In many cases, a special needs trust is also a viable alternative to leaving assets directly to your child.

Caring for special needs children after their 18th birthday

If your child will require help throughout life, you may want to consider future events before he or she turns 18: because as legal adults, you may need to be granted power of attorney to make medical decisions on his or her behalf.

If your child lacks the capacity needed to grant you power of attorney, consider applying for guardianship or conservatorship. Though they are different, both of these positions can be fulfilled by the same person. As a guardian, you are authorized to make personal decisions—such as living arrangements—while a conservator manages someone else’s financial affairs.

Care for your special needs child in your absence

You may not want to think about your child living in a world without you, but it would be nothing short of foolish to ignore this very possibility.

If your child requires specific care, consider leaving a Letter of Intent with detailed instructions to help guide future caregivers and honor your wishes. This document will also help maximize your child’s quality of life and avoid the need for caregivers to learn by trial and error. In addition to describing a typical day and activities your child enjoys, the document will also identify doctors, services, and resources he or she will need.

The bottom line on financial planning for special needs children

As parents, you want what is best for your special needs child. This guide is a great resource to help you start planning steps for financial preparation: especially since the cost to raise a special needs child is often very daunting. Many associated laws, benefits, and resources available depend on where you live, and a certified financial planner and attorney who specializes in special needs planning will act as your best resources.

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Vision Retirement is an independent registered advisor (RIA) firm headquartered in Ridgewood, New Jersey. Launched in 2006 to better help people prepare for retirement and feel more confident in their decision-making, our firm’s mission is to provide clients with clarity and guidance so they can enjoy a comfortable and stress-free retirement. To schedule a no-obligation consultation with one of our financial advisors, please click here.

Disclosures:
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.