Caring for a child with special needs

Wealth planner Robin Waldman deals with her child's financial future head-on.

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Key takeaways

  • The financial planning process can start by simply considering the best options for treatment you can afford.
  • Be careful about how you title assets for a child with special needs, because it could impact benefits down the road.
  • Make sure that family knows the benefit rules, so that they do not leave assets in a way that could reduce disability benefits.

My child has special needs—how do I think about what happens to her after I'm gone?

It can be overwhelming when you are on this journey. I didn't know my daughter Joslyn was autistic until she was 7. They couldn't diagnose her with something specific before that, and even when they did, it took me a while to accept it. I thought it was something I could fix. Now she's in her 30s, and we've learned a lot along the way.

It's almost impossible to think about what happens to your child when you're gone. Who will take care of her medications? Who will comfort her? Who will do all the things I do that I can't even enumerate for anyone? The list of worries bulldozes into a huge mountain.

Every family is different, and every child has different needs. For my daughter, the way I started was simple: I looked at the best options I could find for her that we could afford. She didn't have any acute medical needs, so our focus was on education and communication. I didn't know at the beginning if she'd ever be able to care for herself independently, but now that she's older, I know that she won't be able to do that.

Our attention at the beginning was on making sure she'd be able to have the therapies and tutors she'd need, no matter what happened to me or her father. For us, that meant getting special needs trusts. Her father and I are now divorced, so we each have third party special needs trusts. These are trusts that allow the trustee to control assets to pay directly for certain items and services not covered by the dependent's monthly Supplemental Security Income for disability and will not affect eligibility for benefits.

We didn't do this all perfectly at first

We made the mistake initially of putting money directly in Joslyn's name in a trust, using an attorney who didn't specialize in special needs trusts, so then we had to establish yet another trust to pay back the benefits that she wasn't eligible for because of the money in her name. We also had some issues because her great-grandmother had US government savings bonds in a safe deposit box for her, and we had to put those in the payback trust as well.

You have to be very careful. Family, out of love, will do a lot of things, even listing an individual with special needs as a beneficiary on IRAs or as an heir to other assets. Joslyn has had her Social Security disability payments taken away a couple of times because of such gifts, and we've had to reapply. I had to go in with binders of documents and records. Now I keep close tabs on everything.

Another step we had to take was when Joslyn got older and was considered an adult. I had to get legal guardianship over her. This was because every time we went to the doctor, I wouldn't be allowed in with her because it technically violated her privacy. Guardianship gets me financial and medical access now.

If something happens to either me or her father, Joslyn's 2 younger sisters are her designated successor guardians for legal and financial decisions, and to be trustees of her trusts. They are fierce advocates for her. I know that whatever happens they will be there for her.

Beyond the estate planning, we are trying to find the right living situation for Joslyn as an adult. I've looked at group homes in Michigan. I've visited campuses around the country. There are not many that will keep adults with special needs until end of life. If she has some health issue that crops up at 60, or anything that she needs, and I'm not around, I want to make sure there's a plan for her. That's what all of this advance planning is really about, because I need the peace of mind that I've set her up as best I can, and not burdened the caregivers who will take over for me.


For more on estate planning for loved ones with special needs, see "Financial planning for loved ones with disabilities."

Robin Waldman is a vice president, wealth planner at Fidelity based in Farmington, Michigan.

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