|
| Focusing on Parents of Disabled | More families confront the fact that disabled children will outlive them. That’s why insurance and brokerage houses set up units specializing in financial planning for such situations.
Since that time, when parents expected to outlive their disabled children, life expectancies for some disabilities have doubled. So, this fact impels families for adopting complex financial plans in order to keep up their child's standard of living after parents die or become too feeble to help.
That’s why a program that focuses on financial planning for special- needs families was set up. It also trains brokers to handle such services as establishing trusts for disabled children. The firm also has a referral service to help families find lawyers to set up trusts.
A group, called Special Care, was launched by one financial one, dedicated to special-needs financial planning.
Helping Families
The federal government also is looking for ways to help such families. A special vehicle that allows money to be saved in tax-advantaged accounts for disabled children, was created by the Presidents Committee for People with Intellectual Disabilities.
Since people with disabilities can't qualify for Social Security or Medicaid benefits if they have more than $2,000 in assets, planning for the financial future of such people can be tricky. Unfortunately, parents often forgo their own retirement to set aside money for their special-needs children.
Common Mistake
Placing money in a Uniform Gift to Minors Account, which some advisers suggest as a way to pass along assets to children without incurring big tax hits is one common mistake.
But the government help is available if you know where to look for it, and families should try to share as much of the burden as possible. Planning for both - the parents' needs and the child's – is another thing, particularly since many parents provide some care to their children well into their own retirement. And that includes coordinating life-insurance policies so one parent isn't left with insufficient resources should the other die. After all, advisers suggest investing more money in safer investments such as bonds and lower-risk joint funds, ensuring money will be left for the child.
If the child can't work he or she is given a supplement to make sure they have enough to provide the quality of life they're accustomed to. But in many cases that's precisely the wrong thing to do because it can risk benefits.
Investment alternatives
To determine how much people will need to save for their disabled children, one firm has created an online calculator for families.
This program works with a referral network of trust lawyers who can form so-called special-need trusts, which are mainly funded by parents' life-insurance policies, the payouts of which are deposited in the trust after both parents die.
In this way, special-needs trusts form the centerpiece of most financial plans for these families. The trusts, which aren't counted as assets in eligibility for government programs, typically are set up by parents. They indicate trustees for using the money for the child's supplementary care, such as payments to costly group homes.
Unfortunately, in many cases, neither the parent nor the financial planner will know what to expect in terms of future costs needed to support a disabled person.
|
|
