Securing a Future for Your Child With Disabilities

3. Create a letter of intent. Ensuring that your child’s daily needs are met after your passing is just as important as protecting his or her financial future. Compile a list of doctors’ names and medications as well as the names of friends and enjoyed activities. Outline your child’s daily routine so that the normalcy of daily life may be maintained.

If the plan is for your disabled child to move into a group home or other facility, make that transition happen before your death rather than after.

“When your child is in their 20s or maybe early 30s is the best time to place the child in an appropriate setting,” says Greenberg. “This is better than waiting until a parent dies, or needs to go into a nursing home themselves, and then all of a sudden you tell the child with the disability, ‘Oh by the way, tomorrow you have to live in this other place.’ That’s scary.”

4. Write a will. If you don’t have a will, you put your child’s benefits at risk. The courts will then likely divvy up your estate equally among your survivors with no accounting for your child’s special needs trust or the $2,000 rule regarding federal benefits. In your will, leave money to your child’s trust instead of obligating your other children to care for their sibling. This way your children feel like they can spend their inheritance guilt-free, and it also can help avoid disputes between siblings over who should pay for what care.

“The problem with a morally obligated gift is that the other children get an inheritance, but it is not totally theirs,” says Margolis. “It can also create ruptures in the family, especially if the children that inherit do not agree on how to care for their disabled sibling.”

5. Consider a second-to-die life insurance policy. This kind of policy, which only pays out after the death of both spouses, is cheaper than a standard policy, Platt says. And buy a policy earlier rather than later. The younger you are when you start, the cheaper your premiums will be. Remember to name the trust as the beneficiary.

6. Ensure that your child remains asset-free. Check over all your assets—life insurance policies, IRAs, annuities, pensions—and make sure your child’s trust and not your child specifically is named as the beneficiary, Greenberg says. Inform all family members to do the same and to make sure that they do not bequest anything in their will to the child directly, but rather to the trust.

“Sometimes there is a well-meaning aunt who thinks, ‘I’ll leave $10,000 to my nephew, who has a disability. I think that will help him a lot,’” Greenberg says. “That $10,000 could throw that child off benefits, and not really provide any difference in his quality of life.”

7. Budget for your child’s future. The major factor in determining how much your child will need is figuring out where he will live. Private-pay assisted living facilities can cost $3,000 a month, but costs can be minimal if a family member offers to take him in. Estimate an annual cost and then multiply that by your child’s life expectancy, says Margolis. For example, a person with autism has the same life expectancy as the general population—78 years. But the average person with Down syndrome lives to only 60.