How to financially and legally prepare for raising a child with special needs
WITH the coming of the new disabilities legislation, there is greater focus on making our surroundings more accessible to persons with special needs and disabilities. However, reports suggest that some 85 per cent of Jamaicans with disabilities are living in poverty. So what can parents do today to help prevent their special needs children from joining the bread line?
The steps are simple to say but not easy to do, but they need to be done. Here goes:
1. First, assemble a team. Consulting the right experts will enable parents to effectively plan for their children's financial future. In addition to a financial planner, parents should talk to an attorney who can help them establish a special-needs trust and make appropriate financial preparations in their will.
2. Second, create a letter of intent. This document outlines how you want your special needs child to live if you are not around. Do you take your child to therapy? Where is the therapy office? How frequently does the child go to therapy and how much does it cost? Write it down. Future guardians or caretakers will need special instructions on how to care for the child.
3. Thirdly, establish legal guardianship. Once the child reaches 18, he is considered an adult. However, many special needs children will still require a legal guardian as they'll need assistance well into their adult lives. Establishing legal guardianship will enable the parent to make financial decisions for the child that they can't make on their own. Consult with an attorney who will help draw up the legal documents.
What to do (and not do) financially for your special needs child
There is no question that you want the very best for your special needs child. You have learned to develop patience, you take a lot of time out of your day to take the child to therapy, and the list goes on. But somehow financial planning falls by the wayside. Or, if you do try to save for the child, you are overwhelmed because it is not enough. Well, we have some suggestions that you might want to consider with the proper guidance of your licensed financial advisor.
1. First of all, do not create a bank account or otherwise place assets in your child's name. If something happens to you how will the child get the money? Financial institutions will not hand over money to a minor. And if your special needs child cannot sign their name when they turn 18 (it's a painful thought) then how will they get the funds?
Speak to your banker and then an attorney for guidance on how to structure that bank account so that your child will have access to the money.
2. Next, know that the money you save is not enough. That's another painful thought in a long list of painful thoughts as it relates to your special needs child. However, this is one of the easiest one to solve. Don't rely only on your savings. Again, consult not only a licensed financial advisor but find an attorney and create a trust. How do you fund that trust? An ideal way to ensure funding is to purchase life insurance, sometimes on the lives of both parents (joint survivorship). Grandparents wishing to help might pay the premiums.
3. The third thing to not do is to make your child the only name on the trust. Find a designated guardian for your child in your will and name the special needs trust as the beneficiary of your life insurance policies and retirement plans. Ask relatives to do the same and write a letter of intent explaining the extracurricular activities, such as swimming and horseback riding, that you'd like the trust to pay for. Again, this is something your lawyer can advise you about. And if you cannot afford an attorney there is the Administrator General's department that can provide guidance.
4. And finally, do not name only one guardian for your special needs child. You never know what can happen to that person. Consider naming co-trustees -- a family member or friend plus a professional trustee such as a bank or a lawyer, who can choose the investments and manage the money that you have earmarked for the trust. It's important to pick trustees who will be able to manage the trust for decades (and keep that timeframe in mind when designating a guardian too).
Many families also boost their life-insurance coverage, especially if they want to leave money to other children as well.
You can learn more about how to implement these strategies on September 13 at the Special Needs Legal & Financial Planning seminar hosted by Special Needs Jamaica in partnership with Scotia Insurance, Digicel Foundation, the Administrator General's Department, the Law Offices of Harrison & Harrison and the Jamaica Down's Syndrome Foundation. Register at www.specialneedsjamaica.com or send an email to firstname.lastname@example.org.