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Providing for children with special needs

If you have a child with Down Syndrome, autism, cerebral palsy, spina bifida or another disability or special needs situation — how can you make sure he or she is going to be taken care of financially in the future? Schooling, treatments and more are not cheap. Get some advice here.

The question:

Are there any special financial planning considerations for a child with special needs?

Our financial planning expert answers:

If you have a child with special needs, and it appears likely that they will need some sort of “mental/physical/planning” help in the future, it is more important to have a heart to heart conversation with people you love and determine how best to care for your child — and what will be in their best interest.

From a financial standpoint, it probably makes sense to establish a “special needs trust.” This account identifies responsible, loving adults who can advise, supervise and distribute funds for the child as needed. It make even continue into their adult years. You’ll just need to be sure that the trustees you select are responsible enough to handle the fiduciary responsibility.

One caution for parents, though, is to be sure that your trust is flexible enough so that if your child’s disability improves, they can begin taking on part or full responsibility of their own finances.

Also be aware that some states will not provide government-subsidized services to special-needs children if a child has savings or other investments in his or her name. Talk to your services coordinator or social worker for more information on this topic.

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