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4 Planning Tips for Parents of Disabled Children

Buy enough life insurance. You can’t be replaced, but someone will have to fill in if you aren’t there. Your family will probably have to pay for some services that you used to provide. You can provide the money necessary, even if you don’t have much now, with life insurance.

Set up a trust. Any assets left for a child with special needs, including life insurance proceeds, should be held in trust. Leaving money directly to someone with a special need jeopardizes public benefits. Some families disinherit children with special needs, relying on siblings to care for them. This approach is fraught with potential problems. The best approach is a trust fund set aside for the child with special needs.

Write down the care plan. You must write down what a future caregiver will need to know about your special needs child. You may know everything but you need to write it down so it can be passed on. The memo or letter can be kept in the attorney's files or with the parent's estate plan.

Coordinate with other family members. Even a carefully developed plan can be sabotaged by a well-meaning relative who leaves money directly to the child with a special need. If a trust is created for the benefit of the child, grandparents and other family members should be told about it so that they can direct any bequest to the trust.

Comments

JMD said…
Very useful post, thanks for writing it, but I was wondering whether you could elaborate, especially on the first point -- buying enough life insurance. How do you decide how much is enough? How do you compare life insurance companies? What items should you make sure your life insurance policy covers?

JMD
February 2, 2011 at 12:32 PM
Edward H. Adamsky, Esq. said…
The amount of life insurance depends on your circumstances. Usually it is designed to replace what you do and what you make. If you are a primary caregiver, what would it cost to replace your services? If you bring in income that pays for caregivers, then you need enough insurance to replace that income. Look for good ratings on insurance companies and consider talking to a reputable agent who can guide you.
March 17, 2011 at 12:14 PM
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