Whether you are a parent or caregiver to a child born with special needs, or an adult who has special needs, below are three important steps to consider to help you and those you care for stay healthy and financially protected.

1. Have a financial plan.
As a caregiver, every day brings new challenges and often times it can be difficult to look beyond the immediate needs of today. It is important to consider your financial future, both your needs and the needs of your special needs family member. A good first step is to identify and engage a financial services professional (“advisor”) familiar with special needs clients. Your advisor can assist you in evaluating and planning for future medical, educational and housing needs of your dependent and for the family as a whole. Begin by thinking about your current needs, your dependent’s needs and what those needs might be in the future. For example, will your dependent need regular, on-going medical treatments? Would he/she live in a group home or need their own space? An advisor will be able to help you project your loved one’s future needs and put a financial strategy into action to fund those needs.

2. Have a written family care plan.
No one knows the needs of your disabled family member or friend better than you. A written care plan provides critical information and guidelines for family, friends and future caregivers. You should also have regular meetings with family and/or loved ones that are currently or will in the future, assist with the care of your dependent to discuss their concerns and options for care. Keep everyone informed of the financial plans you have made with your advisor and update them when changes are made. Educate family and loved ones as to financial issues that may impact the dependent’s ability to receive federal aid. For example, well-intentioned family members may have the dependent named as a beneficiary of an insurance policy or as a direct beneficiary under a Last Will and Testament. Such outright distributions can disqualify a dependent for federal aid. Leaving assets to a dependent in a special needs trust can help to avoid this risk.

3. Have an estate plan.
A proper estate plan can insure the work you have done with your advisor and your family, discussed above, is not for naught. Protect yourself, your dependent and other family members by taking the following steps:

Create and sign essential estate planning documents:

 Last Will and Testament. This is a very important document in that it directs, according to your wishes, the distribution of your assets upon your death. Without a Will, state law dictates in what manner and to whom your assets go. As discussed above, outright distributions to a special needs person could potentially risk their federal and other benefits. With a Will, you can direct that such inheritance instead passes to a special needs trust. Your Will is also the document in which you name a guardian for minor children and/or minor dependent(s) when you pass away. Please note that once the minor attains age 18, you must petition a court to be appointed guardian (discussed further below). 

Just as your care and assistance is needed by your dependent, you
want to insure that you
 are protected as well, in case of your disability.

Power of Attorney. With a Power of Attorney you can name an individual (or individuals) to make financial decisions and transactions for you if you are unable to do so for yourself. For example, the individual named, known as an Attorney-in-Fact, will have the ability to sign checks to pay bills for you, buy or sell real estate, vote stock, etc. Without a valid Power of Attorney a family member would have to go through the court process of being named as your guardian before such family member would have the ability to manage your finances if you become disabled.

Healthcare Documents. With certain healthcare documents, such as Healthcare Surrogate Designations, Living Wills and HIPAA Authorizations, you can insure that your wishes with regard to your health care are known and honored.

Healthcare Surrogate Designation (also known as a Medical Power of Attorney) names individual(s) to make medical decisions for you if you are not able to do so yourself. Such decisions might include consenting to treatment or a change in medication or a change in healthcare providers.

Living Will Declaration (also known as an Advanced Directive) makes known your wishes with regard to life support (i.e., artificial nutrition, hydration (“feeding tubes”) and respiration (“breathing tubes”). Some states also incorporate within this document provisions to direct organ donation.

HIPAA Authorization names the individuals (your named healthcare surrogate(s) and other family members and loved ones) you want to have access to your private medical information.

Special Needs Trust. As a caregiver you might consider establishing a special needs trust to benefit your dependent. As mentioned above, a special needs trust allows caregivers, family members and loved ones a way to provide benefits to a special needs individual without risking his/her federal benefits. Special needs trusts can be funded over time or can be funded with an inheritance or life insurance policy. These types of trusts are used to supplement or enhance the needs of the dependent that go beyond those provided for by government assistance programs.

Appointment as Guardian. Even though you may have been caring for your dependent for many years, maybe even since the dependent’s birth, once the dependent attains age 18 you must petition a court to be appointed as guardian of the now adult dependent with special needs. Please note that you can name a successor guardian of the adult dependent within your Will. However, the successor’s powers are not effective until the court officially appoints a new guardian. A court appointed successor or stand-by guardian can help to speed this process along. By filing a petition with the court during your lifetime to name a successor, the successor or stand-by guardian will be able to act immediately upon your death or disability, and will only be required to make a simple filing with the court to be officially appointed as the guardian.

This article is intended for informational purposes only. We encourage you to speak with an attorney experienced in special needs planning for more information and advice.