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Some issues to consider with respect to special needs planning

Caring for a child with special needs is something that is close to the heart of a good number of Americans. This is a particularly important issue dealt with in estate planning. Many parents facing this issue aren't sure where to begin, though. While there are various facets and approaches to special needs planning, we'll offer some suggestions here for the issue as a whole.

First of all, it is important that parents caring for special needs children use their money wisely. The costs of caring for such a child can be great. And yet, without providing for their own needs, parents will not be able to care for the child's needs. For this reason, it is critical for parents to see to their own financial needs, particularly retirement needs, first.

As with every complicated issue, it helps greatly to have the rights professionals to work with. The basics would be to work with an attorney and a financial planner. Together, the two will have important insights about legal and financial matters involved in special needs planning.

An important piece of financial planning for adults with special needs involved qualifying them for government benefits. Qualifying for Medicaid isn't necessarily complicated, but for some families it takes a bit more maneuvering than others.

Many families end up setting up a special needs trust in the course of their planning. These are trusts which hold assets that can help pay for a disabled child's care and expenses without disqualifying them from government benefits. Some families make use of life insurance policies to fund these trusts, but others fund the trust right away.

Finally, special needs planning is often embedded in or leads to a fuller process of estate planning. This includes selecting people to act as administrators of the trust, selecting guardians, powers of attorney, health care preferences, and so on. All of this is part of caring for a special needs child as well, since leaving behind a mess can only complicate matters for a disabled child.

Much more could be said about each of these areas, which is why working with professionals is so important.

Source: New York Times, "Assuring Care of a Family Member With Special Needs," Ron Lieber, October 5, 2012

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