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Family Members with Special Needs:
Things to Consider

There are more families dealing with special needs issues than most people suspect. An estimated 15 to 20 percent of Americans have an impairment that makes them permanently disabled, and the disability may put financial and logistical stress on their families.

Due to medical advances, special needs children have been able to survive illnesses and live with conditions that usually were fatal in the past. As more premature babies have been saved, the risk of those children having disabilities has risen; and as more women give birth later in life, the risk of genetic disorders in their babies increases.

Families dealing with special needs issues have unique financial challenges. Seventy to eighty percent of individuals with disabilities of working age are unemployed. Of those who do work, census reports indicate that the median salary is $26,700. The federal government estimates the cost of residential care (without medical needs) at about $45,000 per year, stressing the importance of creating an effective financial strategy early.

Parents planning for retirement need to save extra to cover the long term expenses associated with a special needs child. Sometimes, life insurance can play an important role in filling the gap between what's needed to help support a special needs family member, and family financial resources available to fill that need.

The parents of a child with special needs should also make sure that they have made other plans:

  1. Create estate planning documents that have the right kind of trust language intended to maximize help available to a special needs child. While federal and state government agencies offer programs to help those with special needs, access to those programs is often limited to those who can demonstrate financial need. Parents who make financial plans to take care of disabled children in the event of the parents' death consider creating a special needs trust, designed to make inherited funds available for support, but in a way that won't impair eligibility for government benefits*.
  2. Create a written plan of care for others who might unexpectedly be called on to act as caregivers. Those responsible for the daily care of a special needs family member should write instructions down. Such instructions, referred to as a care plan or letter of intent, are written information about the health information of special needs family member.

    A care plan might include

    • A description of the special needs family member's medical conditions
    • A list of the family member's medications
    • A list of known food and medication allergies
    • Suggested schedule for visits to doctors and therapists
    • Medical emergency procedures
    • A list of medical professionals, contact information and insurance information
    • Other relevant information about lifestyle or care

3. Connect to the right resources and support groups to provide needed information and services at the proper times. Families might need to be connected to local respite or sitting services, attorneys, advocacy groups, vocational trainers or health care providers.

* This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your situation with a qualified tax or legal advisor. This material was prepared for use by LPL Financial advisors affiliated with Bay Financial Associates, LLC.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

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