At this stage, it is vital for you to put basic and flexible financial protection into place for the well being of the family.
Create a Simple Will:
Most families don’t have a will. Because you have a disabled child it is vital that you identify a guardian in case something happens to you and your spouse.
You need to insure the future financial protection of your child in case of your death. Most likely finances are extremely tight and although you need permanent life insurance, chances are you can not afford it at this stage. A convertible term-life
insurance policy for you and your spouse will give you cost-effective coverage that can later be converted to permanent coverage at the current rating classification. Given the stress associated with parenting an special needs child, it is common for a parent to develop health conditions that will greatly increase the premium or may preclude obtaining life insurance when you are ready to establish a Special Needs Trust. A convertible term policy guarantees you can get permanent coverage at a later date.
You need to protect your income stream in case of disability. Some employers may have short term disability coverage. In many cases, this may be limited. If so, supplement your coverage to insure your child’s programs are not interrupted.
We can help you determine how much coverage is right for you.
Later Stage Emotions:
In the later years’ chances are you accept the circumstances of having a child with special needs and life will begin to be more predictable. Most likely your child’s educational program is in place and your attention now turns to life after 21 or schooling for your child. At this point, it is time to start adjusting your financial plan for the long term.
Critical Late Stage Moves
Establish a Special Needs Trust:
Find an attorney who specializes in Special Needs Supplemental Trusts.
As your financial situation begins to strengthen, begin
converting the term insurance to permanent insurance. The
need for these funds will long outlive both the term policy and
you. Whole life insurance, or permanent insurance, will provide
the funds for your child after your death.
Update your Will:
At this stage chances are a family member or a close friend will
have taken an interest in your child’s future and would be
honored to be the guardian if something were to happen to you.
Revocable versus Irrevocable. A revocable trust stays within your
estate, while the irrevocable is outside your estate. Your attorney
can explain the merits of each as it pertains to your estate.
Vital Trust Language:
Special needs language. It is vitally important the language of
the trust be written to comply state and federal laws to insure
those funds are always available to your child to supplement the
services provided by the State and Federal agencies.
Funding the Trust:
Implement and fund the plan by naming the trust as the
beneficiary of your life insurance policies. Review annually and
adjust to any changes in your life and with regard to state and
Any funds you leave your child must be supplemental. This will
enable the trustee to spend the funds in a way that maintains
your child’s quality of life.
Long Term Care Insurance:
As the general population lives longer the likelihood of needing
long term care is greater. All of your planning for your child’s life
after you are gone can be destroyed by a long term illness.
Proper planning can help protect your child’s plan and give you
the needed funds for your care. By starting early (ages 40’s or
early 50’s), and purchasing a Connecticut Plan Long Term Care
Policy, you can easily protect your child’s plan
You will be amazed at the relief you will experience when the
trust is in force and funded.