6 Steps to Secure the Future of your Special Needs Children
Parents of special needs children have to make financial plans for two generations. They need to provide for their own needs and their child’s current and future needs. Planning is necessary for the period when they will not be there to provide guidance and support.
“As parents of special needs children, you might not have the power to make life “fair,” but you do have the power to make life joyful.” And to do so, you need have your financial plan in place.
Parents of a child with special needs have to make financial plans for two generations. They need to provide for their own needs and their child’s current and future needs. Planning is necessary for the period when they will not be there to provide guidance and support.
The cost of bringing up a child is high. Raising a special needs child requires an even more significant commitment. It isn’t easy to plan for the current and future financial needs of your special needs child.
Parents need to consider the cost of medication, therapy, specialized care, and education. They also need to keep the high inflation of health care costs in mind. Also, need to make a monthly budget that covers these costs. This budget will help them to make a financial plan for the child’s future needs.
Special needs children may need help from a guardian who will help them to manage their affairs. Parents need to look for trusted people who will take care of their loved one when they are not there.
Raising special needs children can be challenging, but it is also rewarding. It’s essential to ensure that parents enjoy a good and meaningful life. They need to seek support from friends and family members who care about them and their child.
Let’s take a closer look at things to consider while making a financial plan for your special needs child:
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Create a support system for your special needs children
Kids with special needs may not be capable of taking financial decisions even when they become adults. Their parents need to make plans to ensure that they will get the guidance they need. They need to look for people who can manage the financial affairs of their kids without any selfish motive.
It’s essential to create a support system which will take care of your special child. Look for friends and relatives who can provide the guidance and care your child needs. Involve people who have the capability, time, and inclination to help from the beginning.Learn how to mange your money & create wealth, Download your FREE eBook now
How much care will your child need?
Parents need to assess the type and extent of the child’s disability to see if the child will be capable of taking financial decisions in the future. This assessment is crucial because many special needs kids don’t understand financial matters.
They are not capable of taking financial decisions independently. If you think that your child will be able to take financial decisions, there will not be any need to appoint a guardian. Unfortunately, many children with mental disabilities need lifelong care.
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Make a financial plan
Parents of special needs children have to make realistic financial plans. They need to plan for their own financial needs as well as for their child’s current and future needs. They may have to hire caregivers for kids who will need lifelong care and may even have to arrange for a child care facility.
Lifelong care requires a significant amount of money. Parents of special kids need to plan for their retirement as well. They need to create an investment corpus that is big enough to achieve both of these goals. If the corpus is inadequate, they may have to work for more years, be more frugal, or look for other sources of income.
Build a corpus to support your child
Build a corpus that is large enough to provide for the future needs of your loved one. Family members who are willing to support your child can contribute to the corpus.
It is best to start building an investment corpus as soon as you discover your child’s disability. The earlier you start, the more money you will accumulate. For long-term needs, invest more money in equities. For short-term requirements, put more money in debt.
Make a budget for your child’s monthly needs and estimate future needs after factoring in inflation. Determine the size of the corpus that you will need to provide for the child’s monthly expenses. Decide how much you need to invest now in building the corpus. You can also invest in real estate to get a regular rental income.
Arrange for adequate insurance
It may not be easy to get a health insurance policy for your special needs child. You can check to see if your employer’s health insurance policy will cover your child. Get adequate health insurance as well as critical illness cover for yourself to ensure that any medical emergency will not derail your plans.
Get term insurance while you are young to qualify for lower premiums. Personal accident insurance is also necessary to protect your loved one’s future. The sudden demise of a parent can endanger the child’s future if there isn’t enough money in the corpus.
Make a will and trust
You need to make a will and bequeath your assets and the corpus to the trust. Appoint a guardian who will provide guidance and support if you pass on while your child is a minor. The trust will manage and protect the assets for your child. Your savings and gifts received from family members and friends can go to the trust.
Set up the trust as soon as possible, even if you don’t have any money to put in it. Assign your life insurance to the trust and bequeath your estate to it. Seek professional legal advice to make your will and set up a trust.
A financial plan will ensure the well being of your special needs child even when you are not there. You need to get adequate insurance and start building a corpus as soon as you discover your child’s disability. Build a support system of trusted family members and friends who are capable and willing to guide and support your child. Make a will and set up a trust without delay. The future well being of your special child depends on making the right arrangements at the right time.