Erin Bui digs deep, sharing her family’s concerns about her special needs uncle, who is on the autism spectrum. She then brainstorms ways to protect her uncle’s future through special needs financial planning, which encompasses life insurance, special needs trust, disability insurance, long term care, and tax-advantaged investments.
Control is what we all want in our lives: we want the world to be perfect, at least, by our own personal standards. However, the world is surrounded by imperfection and we must be at peace with that. I believe that imperfection is what makes the world beautiful. We cannot control the outcomes of natural events. However, an individual can do their best to make decisions that can positively affect their life and people around them.
The Need for Special Needs Financial Planning
We do not choose our family. However, we make the most out of our situation. No family is perfect. We have gone through pain, loss, happiness, ups and downs, and we are grateful that we are still together.
I have an uncle who is on the autism spectrum. He has trouble focusing on one person or thing. He is not able to communicate to people, and is unable to express his thoughts. This has caused us some trouble at home and in public, over the years. We always worry about him, and most importantly when he is physically unwell, his behaviors intensify. You would not want to meet him on certain days.
No human being is one dimensional. My uncle has a beautiful caring side of him that will bring a smile to anyone’s face and sometimes tears of joy and wonder. I remember there was a time when my grandma was severely sick. He would sit next to her and would help her to get up and go to the bathroom, or to get her food, medicine, or water. I know, at that moment, that he was afraid that his mother would leave him. In fact, he stayed so quiet and there were no behaviors during those days his mother was sick. It was a stark contrast as he usually likes to argue with her (it is his way of communicating).
We love our uncle so much and every day, we are worried about what will happen to him and who is going to take care of him when we are gone.
Is he able to outlive us?
How can he fend for himself without his mother?
Is he going understand the loss?
Where will we find the money to tend to his needs?
I share this personal family story because I want you to understand why I am drawn to Mangus Finance. The team has such a strong understanding of what goes on under the roof of special needs families. We are focused on ensuring that special needs loved ones are protected. Mangus Finance has several products that can safeguard the individual from any unexpected scenarios, which I will discuss. Like I said, we cannot predict or control the future, so it’s time to start understanding special needs financial planning.
Planning for Special Needs Families
1. Life Insurance
A caregiver, such as a parent or my grandmother in this case, provides care to their special needs loved one for free. The caregiver sometimes uses their retirement savings, pensions, or even social security benefits to provide for their child. The special needs loved one may be devastated, should the caregiver leave the world. Therefore, having a life insurance can help the special needs loved one with the money to hire a caregiver.
Any parent, grandparent, uncle, or aunt afraid that they might pass away before their special needs loved one, can provide the special needs child with a life insurance policy (in a special needs trust). A second to die policy, say, for both parents, is the most cost effective for legacy planning.
Take our test here to see how prepared you are and learn more about the benefits of life insurance.
2. Special Needs Trust
Special needs trust, also called supplemental needs trust, is a legal document designed for individuals with disabilities to receive items in the trust for his or her benefit. Estate planning is key as it ensures a special needs child’s government benefits such as SSI and Medicaid are not threatened. If you need to learn about special needs trust or estate planning, please refer to our page.
3. Disability Insurance
For those families in their prime working years, a disability insurance plan provides periodic monthly payment of benefits when a disabled person (such as the special needs loved one’s primary caregiver) is unable to work. This disability insurance is designed to help cover 45 % to 65% of the gross income on a tax-free basis.
4. Long Term Care
A long term care plan helps ensure that your long term care will be provided for. It allows you to conserve many of your assets for your child’s care, instead of having to spend down your assets to achieve Medicaid to pay for high care costs.
5. Tax-Advantaged Investments
An ABLE account or a 529 can help provide your child along the way. The money in ABLE accounts grow and can be withdrawn tax-free. The funds can be used for a variety of expenses, and there would not be any limitation on withdrawals, as long as it is for the benefit of the special needs loved one. Another benefit of ABLE is easier to maintain and less expensive, unlike having a special needs trust. In certain cases an ABLE is sufficient. In others, a special needs trust is necessary.
Key Takeaways of Planning for Special Needs Families
Special needs care has come a long way, sadly due to the increased prevalence of autism. We should take advantage of the time now, to save our loved one who would be left helpless if we are gone. Planning ahead for a special child is always a tough thing to do, and it’s hard to know where to start, but the time is now. Let’s not make a mistake that can waste your time and money.
Constructing a specialized plan after a strong discussion on your family’s unique needs is what we do here at Mangus Finance. We understand the unique challenges of taking care a special needs child, and we want to make your life easier in our own little way.
Erin Bui is the Mangus Finance Circles specialist based in Riverside, CA, focused on helping special needs and senior communities with financial education and awareness.