Planning Children with special needs require special planning

Key takeaways

  • Begin by assembling a team of experts to help guide you and your family.
  • Consider creating a special needs trust that can help pay for needs beyond what government benefits provide.
  • A 529A ABLE Savings Plan can also help to supplement government benefits and private insurance.
  • Make arrangements for continued care for after you’re gone.

Kimberly Greenberg and her husband’s journey as parents of a child with special needs began just hours after child birth, when their infant daughter failed her newborn hearing test. The following week, baby Parker failed the hearing test again.

Weeks later, she was diagnosed with an eye condition known as strabismus. And as time went on, her parents noticed she wasn’t reaching the milestones most babies reach in their first year, from sitting up to reaching for toys. Worse still for the parents, there was no immediate answer as to why. What was clear was that Parker was not developing the way most children do.

So, with their doctors’ guidance, they started intervention early. Their medical team quickly grew to include Parker’s pediatrician, neurologists, geneticists, ophthalmologists, orthopedists, audiologists and cardiologists—as well as physical therapists, occupational therapists, speech and language therapists, developmental therapists, even aqua therapists. Visits to these professionals became part of their daily routine.

But it took months of waiting for genetic testing to reveal any insight. Finally, after 14 months of uncertainty, the Greenbergs received lab results indicating that Parker had a rare genetic disorder—one of six documented cases in the world at the time. Not 10 months later, they received another diagnosis: Parker fit the profile of a new disorder, this one discovered only in 2017. Today, she is one of 23 documented cases worldwide.

Since then, life has been a whirlwind of doctor’s visits and therapy sessions for Parker as her parents plan for a future most families never even have to contemplate.

“We feel [our child’s] heartache along with our own as we yearn for just one day that’s less of a struggle,” says Kimberly Greenberg, a New York-based UBS Financial Advisor. “We have learned not to take anything for granted. The coveted milestones become ‘inchstones’ as we look to move forward every day, even if it’s just a little progress.”

I know the fear and loneliness that other special needs families feel. I also know the hope that can come from being financially prepared.

- UBS Financial Advisor Kim Greenberg

To help families like hers, Greenberg recently became a Chartered Special Needs Consultant®. With her colleague, Armand Del Medico, a UBS Financial Advisor and Certified Financial PlannerTM, Greenberg works to help parents navigate the financial and emotional complexities of raising a child with special needs. “I know the fear and loneliness that other special needs families feel,” she says. “But I also know the hope that can come from being financially prepared. And it’s my mission to bring that hope and confidence to more special needs families.”

Unique challenges, significant costs

Across the US, 65 million people, or about one in five, will have some type of special need or disability in their lifetime.1 Many with special needs are children. And as any parent of such children knows, providing special care can feel all-consuming, whether it’s finding the right doctors or even getting help with day-to-day household needs. Amid all this is a need often overlooked: Finding a way to pay for your child’s care and resources.

Parker on Halloween

These costs can be staggering. The average lifetime cost of caring for a person with a disability is approximately $1 million—roughly four times the amount it takes to raise a “typical” child from birth to age 18.2 And for many parents, there is no obvious “one-stop shop” where you can access a broad range of resources and professionals.

“I am a financial planner,” Greenberg says, “and even I found it very hard to plan for the future.”

“There’s so much more additional stress as the parent of a child with special needs or other health issues,” she continues. “Until you live it you don’t really understand it.”

Getting an early start on planning is essential, Del Medico says. You can begin by assembling a team of experts—doctors, therapists, attorneys and financial planners—to help guide you and your family through supporting your child, he says.

“As long as you’re putting in that network immediately, it will make your ability to cope a little less stressful, knowing you can just pick up a phone and get the answers you need.”

The Greenberg family

Making the most of government assistance

Many parents will also want to look into the possibility of government assistance for their child. As the UBS Advanced Planning team notes in their whitepaper “Planning for family members with special needs,” (PDF, 164 KB) some individuals may qualify for the Social Security Administration’s Supplemental Security Income (SSI) program or Medicaid health services.

However, keep in mind that to qualify, an individual with special needs cannot have more than $2,000 in countable resources in his or her name. Exceed that threshold and the beneficiary may no longer be eligible for benefits. Also, those who enroll and later lose eligibility may face tough legal battles to regain access.

“You might have grandparents open a custodial account for their special-needs grandchild,” Greenberg warns. “The next thing you know, the child is no longer eligible for extra aid from the government because they have too much in their name.”

Fulfilling needs beyond SSI and Medicaid

One of the best ways to provide for a loved one with special needs, without running afoul of the government’s $2,000 income limit, is through a special needs trust, according to Greenberg.

“Opening up this type of trust is key,” she says. A third-party special needs trust is often the ideal option for families because generally the government does not recoup any remaining trust assets after the beneficiary has passed away.

By creating a third-party special needs trust, parents and grandparents can put away substantial assets to pay for additional things the child might need beyond the monthly SSI cash payment and the basic medical care that Medicaid provides, which may include living expenses.3 This type of trust can also help ensure that your child’s needs are provided for and that the funds are protected, particularly after both parents are gone.

Because the assets contributed to the trust have never been in the child’s name and the trustee has discretion about how to use the money, typically for "supplemental, extra care, comfort and happiness"—taking care not to duplicate government benefits—the child maintains SSI and Medicaid benefits. At the end of the child’s life, whatever is left in the trust generally may go to siblings, charity or whomever the parents designate.

529 ABLE accounts: another financial tool

Families can supplement government benefits and any private insurance they have by taking advantage of the new 529A ABLE (Achieving a Better Life Experience) Savings Plan. This program allows families of disabled children to pay for a variety of qualified disability expenses, including education, housing, financial management and other expenses to help improve your child's health, independence and quality of life.

Like 529 education savings accounts, 529 ABLE plans are tax-advantaged and state-sponsored. Families can contribute up to, generally, $15,000 per year for 2019 (PDF, 164 KB). But be mindful: Different states have different rules. And in any state, if the account exceeds $100,000-$102,000 (depending on the disabled beneficiary’s other personal assets), the individual’s SSI benefits will be suspended until the account falls below that threshold.

Planning for your child’s life after you’re gone

As difficult as it may be to talk about now, developing a plan for when you pass away is another essential step. In addition to naming a successor guardian or caregiver, families should consider creating a Plan of Care4 to share insights with their child’s future caregiver about his or her personal preferences. 

Developing a plan for when you pass away is another essential step.

This document can include everything from the housing and educational arrangements to your child’s favorite foods and the styles of clothing he or she likes to wear. It should also include contact information for the child’s primary care physician, specialists, therapists and other professionals. That way, if something happens to the primary caregiver, the next person can step in and seamlessly continue providing the needed care, with the goal of making a difficult transition easier for everyone.

With proper long-term financial planning, you can enable a more comfortable lifestyle for your child today and help ensure appropriate arrangements are made for the continued care, companionship and financial support long into the future.

For her part, Kimberly Greenberg recently completed a financial plan for Parker, opened an ABLE account at UBS, and is working with strategic partners to open a special needs trust.

“I feel more prepared to tackle the future,” she says. “I can put more of my focus now into the day-to-day and sleep better at night knowing that we have a plan in place.”

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