According to a recent survey conducted by MetLife, sixty percent of parents of special needs children don’t expect those children to be financially independent. However, 68% of those same parents haven’t written a will and 29% have not done anything to plan for their child’s future. While it is understandable that many of these parents are so strapped for time that they haven’t done any significant financial planning, not knowing where to turn for help also presents an obstacle to financial planning for a special-needs child’s future. The prospect of their special needs child surviving them is not one many feel comfortable discussing, but it is a subject that parents should embrace sooner than later. One of the major barriers, apparently, is the lack of available specific financial planning information, according to 66% of the parents in the survey. The following statistics from the MetLife survey further confirm the absence of sufficient planning for these children:
Apparently, there is a great need for professional help in this area. The first step we recommend is to find an attorney who specializes in planning and legal matters for parents of special needs children. These services would most likely include (but not limited to):
You would also need assistance from a reputable life insurance agent or broker to help you set up the correct insurance policy to fund the trust in the event of death. Joint Survivor or Second-to-Die life insurance is the insurance product generally used to fund a Special Needs Trust for a two-parent family. The policy will pay the beneficiary (the trust, in this case) upon the death of the second parent. The trust will have instructions as to how and when the funds from the insurance policy should be distributed. Also, life insurance policies are often acquired on each of the parents so that the financial burden on the remaining spouse would be eased in the event of one parent’s death.
The information provided in this article is not intended as legal advice. In these matters, you should definitely seek out an attorney and insurance broker who specializes in this type of planning. The Special Needs Alliance (specialneedsalliance.org) is an organization of about 100 attorneys specializing in planning for families with special needs children. We at LifeInsure.com can also recommend specialists in this field for you. LifeInsure.com has planning experts on staff to assist you with your life insurance needs. Contact us
(Technical assistance for the information contained in this article was provided by The Law Offices of Afshin A. Asher, with offices in Los Angeles, California.)