If you have a child with a disability, all-consuming decisions revolve around health care, education, and medical and behavioral therapies. But another area of the child’s life requires the same kind of careful planning, and it can be just as complex — a child’s financial future. Many parents think of creating a special needs plan as a way to make sure their legacy of love lives on — a life plan can create clarity and confidence for your child’s years ahead. Newsday Brand360 spoke to financial advisor Charles Massimo, senior vice president of Wealth Enhancement Group in Deer Park and father of two children with autism, for advice.

The Importance of Planning Now

In the midst of caring for a child with special needs, it may be difficult to remember the importance of estate planning, especially when you consider what might lie ahead. More than 75% of adults with disabilities are not employed, according to the Journal of Practical Estate Planning.

“Without proper planning, an inheritance might make a child ineligible for public assistance. It is important to set aside funds in the event that benefits are taken away and to ensure that money is managed on a child’s behalf,” says Massimo. “The goal should be to create a long-term and comprehensive plan that addresses every aspect of the child’s future, including day-to-day arrangements, all the while maintaining, growing and protecting your wealth.”

Anticipating the Future

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While considering how to plan for the future, Massimo suggests asking yourself the following questions:

• How do I establish a plan that will take care of all of my family’s needs?
• How do we separate goals for each member of the family while still addressing the unique needs of the child with special needs?
• How do we maintain a wealth management plan and protect our assets when we are facing so many unknowns relating to the child with special needs?
• When do we need to start thinking about and planning for the potential guardianship role our other children may have relating to our child with special needs?
• At what age do we start introducing the possibility that our other children may have a role in taking care of their sibling with special needs when we no longer can?
• How do I continually find the right resources at each stage of the life of my child with special needs?

Where to Start

Financial research shows that most families say they are extremely concerned about being able to provide lifetime care for dependents with special needs, and yet most don’t know where to start. Before meeting with a financial advisor, the very first step is to get organized, says Massimo. Here are three ways:

1. Record basic information

Create a document that will contain all the information necessary to handle your affairs if you become incapacitated. The document should include the following: personal information for you and your dependent (names, addresses, dates and places of birth, phone and Social Security numbers, and emergency contacts); account information and passwords (for bank accounts, utilities, credit cards, mortgages, etc.); financial details (including investments); your child’s complete medical history (as well as providers and their contact information), and any other relevant information (including legal information and paperwork).

2. Create a letter of intent

 “Think of a letter of intent as an instruction manual for your child’s future caregiver,” says Massimo. “Take your time with this document and add to it as new points occur to you.” In addition to including education and work experience, existing resources and the need for future resources, housing recommendations, legal and financial arrangements, and a list of trusted family members and friends, the letter should include such details as your child’s favorite and least favorite foods, hobbies, daily routines, etc.

3. Gather documents

After writing down everything that another caregiver will need to know in your absence, it is important to pull together important documents. Include copies of everything from birth certificates, driver's licenses and Social Security cards, to medical records, therapy plans and educational paperwork, to life insurance policies, investment accounts, and real estate deeds.

A Holistic Approach

With all materials in hand, it is now time to meet with a financial advisor who has experience in special needs financial planning to create a holistic life plan for your child. “Work with your advisor to put together a network of professionals to supplement your existing support structure of family and friends,” says Massimo. Partners might include area nonprofits, an estate planning attorney, a certified public accountant, an insurance specialist, a banker, and a case manager who can help with medical issues, therapeutic needs, housing, social services, and government benefits.

Next, the advisor will address your family’s finances with the goal of ensuring that your child’s needs are met for a lifetime while still allowing you to meet your goals. “The advisor will build a detailed wealth distribution, accumulation and preservation plan that might include a special needs trust, an education plan, a housing plan, a retirement plan, and key risk management instruments such as insurance and legal documents,” says Massimo.

Preserving Benefits

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Throughout the process, the goal will be to ensure that any funds you provide for your child do not interfere with their eligibility to receive government benefits such as Supplemental Security Income, or SSI, Medicaid, and Social Security Disability Insurance, or SSDI — the three main sources of funds. Eligibility is based on financial resources. A well-meaning parent who sets aside funds for a child may inadvertently cause the child to become ineligible for benefits, says Massimo.

Special Needs Trust and Estate Planning

When meeting with your financial advisor or attorney, you will want to discuss two vital options for your child with special needs: a special needs trust, and guardianship.

• A special needs trust is a legal arrangement that allows you to set aside certain assets to be administered by a trustee for your child. The trust allows you to provide for the child while protecting the child’s eligibility to receive government benefits. The trust will pay for expenses that are not covered by public assistance. 
• A guardianship, also known as a conservatorship, gives another person the legal authority to make decisions for your child. Guardians are often put into place to protect those who are unable to make sound decisions on their own. Many parents will set of a guardianship for their special needs children in the event of dying or becoming incapacitated.

In terms of your own care, you’ll also want to consider those who depend on you by exploring even more options should you be unable to: power of attorney, and end-of-life planning.

• When you give power of attorney to a person you trust, that person will have the ability to take certain actions, assist with your financial affairs and make decisions on your behalf. Also, consider writing advance health care directives to guide your loved ones if they need to make medical decisions on your behalf. 
• For end-of-life planning, many parents of children with special needs will plan ahead by offering directions on organ and tissue donation or set up and even pre-pay for funeral arrangements.

Pros and Cons of an ABLE Account

ABLE stands for Achieving a Better Life Experience, and it is a type of savings account administered by most states in the country. Rules and limits vary, and the beneficiary must have been diagnosed with a significant disability before the age of 26.

Like 529 college savings plans, ABLE accounts allow parents to create tax-advantaged savings accounts that largely do not, in the case of a child with special needs, count against benefit eligibility. The total contribution to an ABLE account cannot exceed $17,000, with a lifetime limit of $100,000 in New York State (limits may be higher or lower in other states). ABLE accounts can be used tax-free for Qualified Disability Expenses, including most housing, food and transportation.

The downside of opening an ABLE account is the funding limitation. Assets totaling more than $100,000, for example, will affect SSI eligibility. By contrast, there is no limit on contributions to special needs trusts.

Self-Care Is Important

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Throughout the process, it is important for parents of children with special needs to find ways to take care of themselves, says Massimo. "When airplane cabin oxygen drops, you place your mask over your nose and mouth before assisting others," he says. "The same applies to families who are trying to navigate the complex and all-consuming world of special needs.

Parents barely have time for their own personal, emotional and financial needs. They need the time, space and resources to live their own lives as best as they can." Massimo suggests that parents try to exercise regularly, pursue hobbies, eat and sleep well, and get away on short trips if and when they can.

Special needs planning is complicated, with many variables to consider. Wealth Enhancement can help your family create a sound wealth management plan for your family and a life care plan for your child. If you have additional questions or would like to speak to an experienced financial advisor, reach out to Wealth Enhancement today.

Originally published on Newsday. Republished with permission.