Planning for the Future, Part One: When Your Child Has Special Needs
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Three things Solo Moms can do to protect and provide for their child with disabilities
As kids approach the end of high school, most families are preparing their child for college or perhaps travel. They are launching their child into adulthood with the expectation that the child will soon be independent in the world.
For those of us who have children with significant disabilities, we are doing a whole other kind of planning. We are planning for the rest of their lives while simultaneously planning ours.
It’s an emotional, logistical, and complex process to put together a cohesive future plan for our sons and daughters. If our child is getting Supplemental Security Income (SSI), getting services through Medicaid, and getting health care through Medicaid/Medicare, we have to carefully plan and prepare to keep them safe, healthy, engaged, and happy long after we are gone.
Long-term planning involves protecting assets and finances, finding the right people to help, and having a vision of what our adult children will want and need as they age.
Let’s examine some options you have when planning for your child’s future.
Entitlements, such as SSI, do not allow a person receiving that income to have more than $2,000 in assets, so we can’t leave our life insurance or home to our child or he would lose his SSI and Medicaid. Many families set up a special-needs trust. This legal document allows family members to give money or to bequeath money to the trust without jeopardizing SSI.
There are two kinds of special-needs trusts: first- and third-person trusts. A first-person special-needs trust is owned by the person with the disability and is usually monitored by a parent or an executor. It has been funded by a parent or family member, and the person with the disability can use it for expenses. A third-person special-needs trust is owned by the parent (or whoever sets up the trust) and is usually unfunded until the parent dies and then the parent’s estate funds the trust.
Trusts are the only way to give your child a large sum of money without it having an impact on her services and support. They are typically done through a special-needs or elder law attorney and are specific to the state you live in. If you move to another state, you will need to have your trust reviewed to ensure it meets that state’s requirements.
There is a new savings account that about a dozen states have up and running, and more states are in the planning stage. The ABLE (Achieving Better Life Experience) Act was signed in 2014 by President Obama with bipartisan support. It allows a person with a disability to set up a savings account and use it for many—but not all—expenses. Anyone can contribute to the account with a per-year cap of $14,000 and a total cap of $100,000. Contributing above the total cap will affect SSI.
The account can be used for housing, household needs, transportation, health costs, legal fees, employment training and support, assistive technology, and personal support services, along with a few other things.
You may already be your adult child’s “representative payee” for her Social Security bank account and may wonder if you also need an ABLE account, but it really depends. If your child has only SSI and no one is gifting her money (which can be done only through a trust or an ABLE account; otherwise, it is considered income by Social Security), then the one SSI account will be enough. If you have a trust, then family members can leave money to the trust in her will, and your executor (who can be a family member) will pay for approved expenses from the trust.
If the person with the disability has people who want to give him small amounts of money and can manage both SSI and ABLE accounts, then opening an ABLE account makes sense. The tricky part of having two accounts is that the approved expenses are different. For example, you can go to Target and buy a new toaster for your home with the ABLE funds, but you can’t buy bread with that fund—food comes out of SSI. These accounts work best for people who can manage their day-to-day finances with little help.
An ABLE account can be opened at any age, so parents can open one for their child (as long as the age of disability onset is before age 26).
Letter of intent
Having finances in place for your loved one is very important. We want to be sure our child is taken care of as he ages. Equally important is how he is cared for. A letter of intent (LOI) is a statement of understanding between two parties. It is nonbinding, meaning that the parties are not legally required to follow through with the terms of the agreement. LOIs are usually used in business transactions and sales, but it is a term parents and caregivers of adults with significant disabilities also use as a way to express their detailed knowledge about the person and to share the person’s needs and accommodations, and goals and hopes for the future.
There are many ways in which this information can be provided to those who will care for and make decisions on behalf of your child. The key is to be comprehensive. A combination of written material (that you ensure key people have) along with videotaping your child in daily life can present a great picture of his abilities and expectations.
The LOI needs to include medical information that correlates with all doctors listed, along with medications, dosages, medical history, and what someone taking your child to the doctor, dentist, or optometrist needs to know.
Other information to specify includes:
- Food preferences, dietary needs, and diet goals
- Exercise needs and goals
- Recreation interests and hobbies, and what needs to happen to access them
- Sleep patterns and needs
- Hygiene and personal-care needs and accommodations
- Behavioral needs and how to help
- Relationships with family, friends, and community and how to access them
- Daily life, such as what the person does and where she goes
- Transportation needs
- Housing situation, needs, and goals
There also needs to be a plan for who helps make decisions after you are gone. For some, legal guardianship is the right choice, and for others, medical and financial power of attorney is enough.
In all of these options, the person with the disability needs to be part of the conversation. We call that supported decision making, and all parties can make their preferences known in some way.
Setting up trusts and savings accounts, and writing a letter of intent are challenging, not only in terms of the precious time, energy, and money involved but also in terms of the emotional toll these tasks can take. It is hard to imagine our children living a full and engaging life if we aren’t there to take care of things. Think of all this as an act of love so they can feel your love throughout their lives.
For advice and connection, join our closed Facebook group ESME Special Needs or check out Sister Chat for additional support.
Anna Stewart is ESME’s Kids with Special Needs Resource Guide and the Solo Mom of a daughter and two sons on the brink of adulthood. She’s a champion for the rights of people living with disabilities and those who love them.
Please feel free to contact us with any comments or questions.