The Challenges of Financial Planning for Special Needs Family MembersSubmitted by Reby Advisors | Certified Financial Planners | Danbury, CT on December 1st, 2016
For the past 12 months, I’ve been studying at the American College of Financial Services to earn the designation of Chartered Special Needs Consultant™. I had done financial planning for families with special needs children and adults prior to my coursework, but I have to say, studying the subject beyond my personal experience really opened my eyes to the gap between families’ need for financial guidance on these issues and what they’re actually getting.
The first challenge is focusing on financial planning. How can you make the time for it?
Taking care of the individual with special needs, working to support the family, and trying ensure that other members of the family get enough attention of their own, often get prioritized over family finances. Sixty-two percent of families with a special needs individual don’t have a will in place. More than half don’t have a guardian picked for the special needs individual.
I empathize with these families a great deal because a disability in the family can be all-consuming. It takes a toll emotionally and socially.
However, financial planning can really help both the special needs individual and the other family members. As an example, estate planning documents such as wills, trusts, and powers of attorney can ensure that a child with a disability gets what he or she needs in terms of financial inheritance. Letters of intent may communicate how parents want guardians to raise the special needs child. And life insurance and trusts, when executed correctly, can pass on assets to be used by the special needs individual in a way that preserves their eligibility for government benefits.
Additionally, many easily overlooked tax deductions may be available to the family and the special needs individual including qualified medical expenses above 10% of adjusted gross income (or 7.5% of AGI for TPs 65+). Examples include:
- Prescribed drugs, OTC insulin, and syringes
- Dental expenses
- Cost of psychological and psychiatric services
- Premiums for Part B of Medicare
- Cost of guide animals
- Smoking Cessation Programs (whether or not prescribed)
- Special Food Diets
- Special Schools and Institutions
- Medical Conferences and Seminars
This list is not exhaustive. For example, transportation to and from treatments may also be deducted.
As I’m sure you know, disabilities also come with financial costs. Families dealing with these issues deserve expert advice on how to get all the help and relief they’re entitled to.
The key takeaway I’m hoping our readers get from this article is that your finances are inextricably linked to the overall wellbeing of not only the special needs individual but all members of the family. The considerations are vast – as I know from experience and 12 months of coursework – and it’s definitely a good investment of the family’s time to make time for these critical financial considerations.
If you have any questions about this topic or know someone who could benefit from our advice, we are here to help: (203) 790-4949 or firstname.lastname@example.org.