Advice for the care of children with special needs

This article below was written by Marianela Collado, Senior Financial Advisor at Tobias Financial Advisors. It was featured in the Personal Finance section of El Nuevo Herald on Sunday, May 8, 2016. Please find the link to the published article at the bottom of this post.


Raising a child with special needs can be quite a challenge. It requires the support and help from doctors, support groups, the education system and other organizations established for your child’s specific issue.

Given the potentially high cost of medical care, the child’s eligibility for government assistance and any special attention your child needs, financial planning for children with special needs is super important.

From a financial planning standpoint, there are two things that should be a priority for a parent of a special needs child: Guardianship designation and planning for your child’s financial future.

Guardianship designation

If the child is a minor, then like every parent, you should obtain a legal document to name a guardian to look after the child. This is the person that will take care of your children in the event something should happen to both parents when the children are minors.

A special needs child that turns 18, while no longer a minor, may not be able to look after their own affairs. In this case, it may be necessary to have a legal proceeding where a family member (usually mom) will ask the court to find that the child is unable to manage their finances and care for themselves.

The court will appoint a guardian, which may include mom/dad and a successor guardian should something happen to the parents. This person will assist the special needs child with everything from healthcare, education, housing, food and all other issues affecting the child.

In all cases, when selecting a guardian, it is a good idea to speak with the person you plan to name as guardian. It has to be a role the person is willing and able to take on.

Planning for your child’s financial future

Depending on the circumstances, the child might be eligible for supplemental security income and Medicaid will probably cover the cost of your child’s medical care if they qualify for government assistance.

The problem is that in order for the child to qualify for medical assistance, the child’s financial resources must be limited. If you are interested in ensuring that your child’s financial future is secure and that resources are available beyond public assistance if they need it, a Special Needs Trust might be a great option.

These types of trust are usually designed to provide benefits to your child only to the extent the child’s government assistance is not sufficient to cover their medical care costs. The funds in this trust would not affect the child’s eligibility for this assistance. A trustee is selected to manage the trust assets and distributions to the child.

There are attorneys that specialize in planning for children with special needs. It is recommended that one be consulted for guidance on naming a guardian and understanding whether a special needs trust is appropriate for your child.

Link to article in El Nuevo Herald: http://www.elnuevoherald.com/noticias/finanzas/article75945902.html