Estate Planning for my Special Needs Child

As the parent of a neuro-diverse child on the autism spectrum there are things that can consume your thoughts and drain your energy if you let them. I’m going to be completely transparent here in hopes that another parent experiencing similar anxiety might find comfort in knowing. they are not alone and maybe benefit from what I’m going to be sharing here (or share their thoughts or plans for the benefit of others).

When my dad passed away my mom and I found ourselves completely lost because we honestly didn’t think the day would ever come because he was always so much larger than life. Obviously, my mom was devastated and relied a lot on me to make decisions and get things settled that needed to be settled on her behalf. Dad’s estate was probably more complicated more than typical estates because he had multiple investments, real estate, farmland, farm equipment, physical assets, and multiple life insurance policies and annuities.

Understanding the Importance of Estate Planning

Dad loved my mom dearly and his top priority was to make sure that she was well taken care of when he was gone so he hired an attorney to do his estate planning (which was the smartest thing he could have done). Upon Dad’s passing we met with his attorney, who is honestly one of the absolute best in the industry, and he outlined everything that he had setup in terms of trusts, etc. and explained what was required of us to get everything transferred and moved into place for mom, which was surprisingly minimal in comparison to what could have been an absolute nightmare had there been no estate planning. I have friends who have had to go through the probate process before and from what I’ve gathered, it’s a lengthy and complicated process. It was during this time that I realized the huge responsibility that I have on my hands given the fact that I have a disabled wife and a special needs child.

Elaborating on My Situation

I know that all of us have different situations, mine is kind of unique. Not only is my son on the autism spectrum, but my wife is also disabled. This obviously creates some considerations for me that you might not have.

You Need Life Insurance

I recommend starting here first, we all need some kind of life insurance policy. It basically comes down to what you can afford and what fits your situation the best. I know that there are tons of experts in the insurance industry that can probably advise you way better than me, but for the sake of this post I’m going to share what I’ve learned in the simplest way that I can.

• Term Life Insurance: Term life is generally the cheapest type of life insurance. These policies last for a set time period, such as 10, 20 or 30 years and do not have a cash value, meaning you can’t borrow against or cash out a term life insurance policy. If this is all that you can afford, go this route! Keep in mind that this policy will only pay out if you die while the policy is active (in term). However, I highly recommend checking out permanent life alternatives (see below)
  
• Permanent Life Insurance: Permanent life policies are usually more expensive than term life insurance but these policies can last the rest of your life and they do build cash value. These policies grow cash value and once you’ve built enough, you might be able to cash out or borrow against the policy. I would view this as a long-term investment just like you would a 401k or something. Obviously, it would be optimal if you never borrow against or cash out your policy and let it continue to grow until you are gone.

I highly recommend finding a trusted Insurance professional to explain your options and other alternatives that I haven’t elaborated on like Variable & Universal Life Policies that give your loved ones some flexibility in death benefits.

You Need Disability Insurance

In my scenario, I have a disabled spouse and a special needs child my income is crucial to support our lifestyle. Fortunately, I have been able to build multiple income streams over the years from investments that pay dividends as well as royalties from previous business interests. I am also blessed to be gainfully employed with an organization that I plan to continue on with until my retirement. While we are in our 30’s and 40’s we never really think about the idea of becoming disabled unable to work. In my scenarios, I’m blessed to have mutliple income streams so that my family will never be without any income coming in, but in the event that I become disabled, I have a long-term disability policy that will cover my salary moving forward. These policies are typically offered by your employers and are not overly priced when you consider the peace of mind that they bring with them. I recommend checking out aflac (yes, the duck).

Planning for Long Term Care of Your Child

• Guardianship — If your child cannot make important decisions for themselves, you may need to establish guardianship. This will give you the legal authority to decide on their healthcare, living arrangements, and other important matters.
  
• Conservatorship — If your child cannot manage their finances, you may need to establish a conservatorship. This will give you the legal authority to manage your finances and make financial decisions on your behalf.

The Question of Guardianship

Let’s say that I pass away before my wife, she would obviously take on the sole guardianship of our son, but let’s say that she and I both pass away… who will have guardianship of our son? This is probably the scariest thing that keeps the parents of a special needs child up at night. I know that everyone’s situations are different and in many cases there are siblings or family members that will automatically step up and assume responsibilities, but are these your wishes? As awkard and horrible this idea is to think about, I highly recommend you tackle this sooner than later. In our situation we have began this process. Once you have made up your mind and all parties are in agreement, you need to get everything in writing with your attorney and have it filed.

Guardianship by the Age of 18

In the eyes of the law, your child will be considered an adult at age 18. This means that your child will have all the responsibilities of being an adult, regardless of their level of physical and financial independence, to handle adulthood’s aspects. Further, when your child turns 18, you will no longer be able to act on their behalf as their parent, including accessing their bank account, speaking with doctors and other medical providers, and speaking and obtaining records from educational institutions. You may also have difficulties accessing necessary medical records and making medical decisions on their behalf. To continue making decisions on behalf of your adult child, you will need to establish a guardianship.

Supplemental Needs Trust

My son is blessed in that my parents and I have both setup multiple streams of inheritance for him when we are gone. When you have a special needs child (and a disabled spouse for that matter), it’s important to make sure that their inheritance or income after your passing doesn’t interfere with their government benefits. A Supplemental Needs Trust (“SNT”) is a trust that provides for your child’s ongoing needs while supplementing, but not replacing, any government benefits your child may be receiving. Establishing an SNT ensures the inheritance you leave behind for your child remains in a trust but does not make them ineligible for government assistance benefits. When setting up the SNT, you will name a trustee—another adult child, a family member, or even a financial institution—to manage the trust after you have passed away for the duration of your child’s life.

Review Your Estate Planning Annually

Estate planning is not a one-time event but an ongoing process that needs to be reviewed and updated regularly. This is especially true for families with children on the autism spectrum, whose needs may change over time. Reviewing your estate plan regularly is important to ensure that it still reflects your wishes and meets your family’s unique needs. You should consider updating your estate plan if your child’s medical or financial needs change, you experience a major life event, or laws or regulations related to estate planning change.

Closing Thoughts…

Yes, I know this is overwhelming… I just laid out about 10 different things you need to be working on. Try not to get discouraged. To be completely transparent, I had an anxiety attack one evening considering what would happen to my son when I was gone. We can’t let challenges consume us. I recently had a co-worker say to me that the only way to eat an elephant was one bite at a time, keep this in mind.

Let me know what I might have missed, or what questions you might have…