Common Special Needs Planning Missteps and
How to Avoid Them
Over the years, I’ve met many well-meaning, loving parents who mistakenly assume
they’re “all set” when it comes to handling the unique financial needs of their child
with special needs, only to find out later that they’ve missed a key step. It’s
understandable, but these situations can often be avoided with some proper
planning help.
Here are some frequent planning missteps to be aware of that could impact the
financial future of your child or family member with special needs.
6 Common Planning Mistakes to Avoid
1. Creating a Special Needs Trust with an attorney who is not a specialist
A special needs trust is never “one size fits all.” It’s worth the time to research your options and find an attorney with expertise in special needs planning. A specialist can ensure that your trusts and other legal documents are structured and tailored to your unique situation, providing the best protection for your child's future.
2. Failing to take advantage of government programs and assistance available
There are numerous government programs and benefits accessible to individuals with special needs, but keeping track of all the possibilities can be complicated. Adding to the frustration, if you fail to take advantage of these resources you could be leaving money on the table. Educating yourself on the various programs and benefits available can help you feel more empowered and in control. But also, don’t hesitate to contact professionals who can help you navigate the system and maximize the resources available to your loved one.
3. Having a Special Needs Trust document but no defined plan on how/when to fund it
While establishing a Special Needs Trust is a significant step, it's important to remember that it's not the end of the journey. Families often overlook the importance of a well-defined funding strategy. It's not enough to have the trust document in place; you need a clear plan to meet your loved one's needs over time and ensure they’ll receive the coverage you intended. This is where engaging a financial advisor specializing in special needs planning can be invaluable.
4. Relying too heavily on family members for future caregiving
It's important to have a comprehensive plan in place that doesn't rely solely on the availability of family members for caregiving. Sudden changes in their own health or finances may arise, impacting their ability to provide full or part-time care as planned. It’s always beneficial to know your options. Help can be found from individuals with previous experience caring for someone with special needs, assistance from local non-profits, or special programs that provide care, activities, and opportunities for socialization. Target some resources proactively in case you ever need an extra hand.
5. Procrastinating on planning for a loved one's long-term care housing needs
Waiting too long to research and plan for long-term care housing options can significantly limit your choices and, worse, potentially lead to less-thanoptimal living arrangements for your loved one. Special needs housing is often accompanied by long wait lists and a lack of clear information. The earlier you plan and fully understand your options, the better your outcome will be. 6. Not relying on a financial advisor who focuses on special needs planning.
6. Not relying on a financial advisor who focuses on special needs planning
Financial advisors with experience in special needs planning can help you develop a comprehensive plan that addresses all aspects of special needs planning, including quantifying future expenses for your loved one, investing for a 3-person retirement, and unique insurance planning strategies for special needs. Another benefit of working with a specialist is that he or she will likely have a large network of other professionals they can introduce or recommend who have similar expertise in helping families with special needs. Working with an attorney and financial advisor dedicated to special needs planning will help prevent you from making common mistakes while keeping you up-to-date and informed on all your options. Proper planning helps ensure you’re more than ready for the future. You’re “all set.”
Pat Bergmaier, CFP®, ChSNC® has focused his practice since 2009 on financial planning for families who have loved ones with disabilities. He strives to help families understand how this type of planning is different and unique compared to traditional Financial Planning that doesn’t address a “3-person retirement plan.”