Most Pennsylvania residents know the importance of engaging in timely financial and retirement planning and how it ensures one’s assets are divided off as one wishes but the significance of it is highlighted even more when one has special needs children. Providing for a special needs child’s emotional, physical and financial needs for the long-term is as essential as it is challenging. According to one study, the lifetime cost to supporting someone with autism is around $1.4 million and if the person also has an intellectual disorder, the cost goes $2.3 million.
Though it may seem like the best option, making that child a beneficiary is perhaps the worst step that a parent can take. Rather than helping them in the long-run, it can actually have detrimental effects as children might not be able to qualify for federal benefits that offer financial help as having a limited amount of income and resources to one’s names is a requirement.
Instead of that, there is a number of other estate planning options available. One is to create a 529 ABLE Account, which allows tax-free distributions if the money is used to pay for qualified expenses such as housing and employment training. A certain amount of money can be held in the account without jeopardizing one’s eligibility for federal benefits. This can be supplemented by a special needs trust, over which the beneficiary has no actual control which is why once again eligibility won’t be affected. Long-term care options might also be an option, as a complement to traditional medical insurance, to cover nursing home care or residency in an assisted living facility.
Its important to understand the various tools at one’s disposal when engaging in financial planning for the future. To ensure one understands the implications of each option, it might be beneficial to consult an experienced attorney.