Poll: Parents lack long-term plans for kids with disabilities
April 10th, 2009A Harris Interactive poll has found that most parents of children with disabilities lack a plan to cover a lifetime of care, and those who do plan often make mistakes that could disqualify their child from receiving government services. The research was sponsored by the Hartford Financial Services Group, Inc.
In a poll of 580 parents, 62 percent of parents of children with disabilities reported having no plan to cover the cost of caring for the child when they are no longer able to do so.
Even parents with a plan for their child made costly mistakes. Half of all parents of children with special needs plan to leave money directly to their child and even more (58 per cent) name their child as a beneficiary, either of which could possibly disqualify the child for critical government benefits and services. In addition, only a quarter of the parents have established a special needs trust to provide for supplemental needs and expenses of the child, while not disqualifying the individual from receiving government benefits. These missteps likely occurred because only 16 percent of parents with a plan created it with the help of a financial advisor or attorney.
Parents are urged to:
- Work with a professional financial advisor; and
- Establish a special needs trust.
Earlier posts here.
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July 28th, 2009 at 7:40 pm
You don’t have to be wealthy to establish a Special Needs Trust Fund and it doesn’t actually have to be “fed” until your death.
With that, you can make the fund the beneficiary of a life insurance policy.
No matter what, I’d avoid leaving money for your child to someone else.
Even for those with the best inentions, too many things could go wrong (divorce, accidents/lawsuits, etc.) and the money meant to help care for your child could be lost.
July 28th, 2009 at 4:35 am
You can read more about the Washington State Developmental Disabilities Endowment Trust Fund at
http://www.arcwa.org/endowment_trust.htm
or
http://www.ddlot.org/
The Life Opportunities Trust offers two types of individual trust accounts to meet the needs of families and individuals.
A Trust I, Third Party Trust is an account in which anyone other than the beneficiary may contribute funds. Upon the death of the beneficiary, the remaining private contributions and earnings are distributed according to instructions in the Joinder Agreement.
A Trust II, Self-Settled Trust is an account in which only the beneficiary’s funds may be contributed. Upon death of the beneficiary, the state is entitled to recover dollar for dollar for services provided.
The Life Opportunities Trust has several benefits for families:
Protects and Preserves Assets
Invests in the Future
Receives Matching Funds
Saves for Important Services
Requires $25 a Month Minimum Investment
Avoids Costly Legal Fees to Set Up a Private Fund
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July 27th, 2009 at 2:49 pm
I agree that many parents of children with disabilities lack the funds to establish financial plans and special needs trusts – but in some states there are alternatives that have been developed by advocates from the ARC or other advocacy groups.
Single moms who are caregivers for adults with disabilities often lack the resources to set up special needs trusts or maintain guardianship of their grown sons and daughters, and lack any kind of savings or retirement funds for themselves.
Health care is an even more significant issue for caregivers as well as individuals with disabilities. I am surprised that support for health care reform is not a higher priority in advocacy.
The greatest work being done in that area seems to be the NoEWait group – http://www.twitter.com/NOEWAIT
July 27th, 2009 at 9:55 am
There is legislation called the ABLE Act (Achieving a Better Life Experience) that enables parents and others to have savings accounts in their child’s name without the risk of disqualification from receiving federal benefits. The legislation allows families additional estate planning tools for their child’s future. You may research this bill under H.R. 1205. I would like to encourage all of you to enlist the support of your elected officials to get this legislation passed. Thank you.
July 25th, 2009 at 7:54 am
What is being missed in this poll, at least as summarized here, is the fact that many parents of disabled children, TBI in our case, do not have the funds to establish financial plans and special needs trusts. About the only thing we’re left with is not leaving funds, if any, directly to the disabled person and hoping someone in the family will be able to help with personal needs. Health care in this country must be reformed to meet the needs of all.