Financial Planning For Kids With Special Needs

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My last column was on the lies you must stop telling yourself in order to build a solid financial foundation. Most of us rationalize why we can’t get our finances together right now. Justified reasons to put off financial planning are especially true for parents of special needs children who rarely have two minutes relaxation let alone two nickles to rub together.

I read in a Forbes.com article by Scott Reeves entitled “Financial Planning For Kids With Special Needs” that “32% of parents spend more than 40 hours per week with their special-needs child, or time equal to a second full-time job.” Unfortunately this leave little time for worrying about what would happen to their children if something happened to them.

Estate planning for special needs children may not be urgent, but it is important. Parents with disabled children must have an estate plan to provide for their children without disqualifying them from receiving public assistance. Having such a plan is not the norm.

Here are the statistics from the MetLife survey cited in Reeves’ article:

  • 60% of parents don’t expect their child with special needs to be financially independent.
  • 68% of parents haven’t written a will.
  • 29% of parents have done nothing to plan for the child’s financial future.
  • 88% of parents who have children with special needs haven’t set up a trust to preserve eligibility for benefits such as Medicaid and Supplemental Social Security.
  • 84% of parents haven’t written a letter of intent outlining an agreement for the future care of the child.
  • 72% of parents haven’t named a trustee to handle the child’s finances.
  • 53% of parents haven’t identified a guardian for their child.

Parents are aware of the need to make plans, but 66% say there is little financial planning information available that focuses on children with special needs. Surprisingly, 85% parents turn to their doctor for financial advice.

If you or someone you know has a special needs child make sure they have done the estate planning necessary to best protect their greatest asset: their children.

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David John Marotta is the Founder and President of Marotta Wealth Management. He played for the State Department chess team at age 11, graduated from Stanford, taught Computer and Information Science, and still loves math and strategy games. Favorite number: e (2.7182818...)