Planning for a Special Needs Child

Twenty million American families face the struggle of raising a child with special needs and the number continues to rise. It costs an estimated $3.2 million to take care of a child with certain disabilities such as autism over a lifetime. Parents are often overwhelmed and put off planning for the child’s financial future because they are so burdened with the daily care of the child.

Fortunately, there are many ways to plan for the long-term care of a disabled child, including:

• Special Needs Trust: A special needs trust allows you to allocate funds for the care of a special needs child without leaving your child excluded from federal aid. Parents of a special needs child who also have other children often leave their assets to the other children with the understanding that they will take care of their disabled brother or sister. This is not a good idea because many things can happen to that money over the lifetime of the non-disabled child, such as divorce and bankruptcy. Instead, a better practice is to divide assets among all children equally and place the disabled child’s assets in a special needs trust.
• Qualified Personal Residence Trust: A qualified personal residence trust (QPRT) can be used to provide housing for a disabled child while enabling the parents to stay in the home until they die. This allows parents to take care of a special needs child and, once the parents die, ownership transfers to another heir — a sibling of the disabled child or even a charity.
• Create a Legal Guardianship: Parents don’t remain legal guardians of their children forever, unless they take special action to do so. In Tennessee, at age 18, parents must petition the court to become legal guardian of their special needs child.

If you have a disabled child who will likely need care for life, it’s important to provide these legal protections for your child. An experienced wills and trusts attorney can guide you through this process.