Financial planning can be complicated. When you have special or uncommon things you need to prepare for, it can be even more confusing. Here are three best practices for special needs financial planning.
1. Plan a Timeline
The most effective way to begin special needs financial planning is to plan a timeline. Ideally, you would begin planning for your child’s financial future when you begin planning to have a child, but with a special needs child that usually isn’t possible. Instead, you should begin planning as soon as you know your child will need specialized assistance. Consider what kinds of treatments and accommodations your child will need and when. You should also think about when and where your child will begin and end schooling, what kinds of accommodations he or she will need after becoming an adult and how to provide financial support for him or her after you die. A timeline can give you a set of touchstones to prepare for, which makes it easier to strategize.
2. Apply for Power of Attorney or Guardianship
In some cases, your child may need assistance even after reaching adulthood, in which case you should consider whether you need to consider whether it’s necessary for you to assume power of attorney or guardianship over your child. These applications are usually only filled out if your child is considered incapable of making his or her own financial or medical decisions, so you should discuss your situation with an attorney and with your child’s doctors.
3. Develop a Letter of Intent
In addition to preparations like a will and savings, you need to ensure your child will be cared for personally and financially in the event of your unexpected death or if you’re otherwise incapacitated. Effectively, you need to prepare for the unexpected and unthinkable. A letter of intent can help ensure your child’s needs continue to be met even if you’re no longer capable of meeting them. In this letter, you should include all relevant information about your child’s condition, treatments, needs and schedules. You also need to include contact information for any professionals, family and friends involved in caring for your child. It may also be beneficial to include contact information for any financial advisors or attorneys involved in your child’s financial and legal care. You should update this letter annually or as needed.
Financial planning is highly individualized. No two people’s financial situations or needs are the same, so you should consider which aspects of financial planning are necessary and unnecessary for your situation.