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Financial planning for a child with special needs: 1 man's story

There's no way to predict that you're going to have a child with special needs. You simply decide to have a baby, and hope for the best. Then, on the off-chance a special needs baby is born, the parents respond in beautiful ways to make sure their child has best and most comfortable life possible. In one case of a special needs dad, who found out that both of his sons had cystic fibrosis in 2002, that's exactly what he did. He made sure that his children with cystic fibrosis would be well-taken care of.

Something that helped the dad provide for his children was the fact that he was a financial planner. One of the first steps he took was to enroll his financial planning firm into a group health insurance policy, which allowed him to buy health insurance for his kids at a discounted rate to pay for all the medications they needed, which were more than $100,000 a year.

He also made plans for the day he might not be available to care for his sons by purchasing life insurance and setting up an irrevocable trust with his sister and brother-in-law as trustees. The life insurance would fund the trust, and the trust would pay his sons' bills in the event of the father's death. Sheltering the life insurance proceeds in a trust like this ensured that any funds left behind for the children would not destroy the children's ability to receive needs-based assistance from the government.

When it comes to planning for children with special needs, it's important that parents start as soon as they discover that their children will require extra care. Ultimately, there are many tools available to help parents plan for the future, and this is why it's so important for parents to educate themselves.

Source: MarketWatch, "How one father meets the financial needs of sons with cystic fibrosis," Morey Stettner, accessed April 27, 2018

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