Shaping the Financial Future for a Child with Special Needs

As a parent, preparing for your own incapacity can be crucial.

Looking out for a child with special needs can be complicated under the best of circumstances. Many parents have made plans for a time when they are no longer alive and won’t be able to provide care. Yet they may not have considered another possibility—who will manage care for the child if the parents become unable to do so?

For families of children with mental or physical disabilities—including substance abuse issues and other potentially chronic problems—that’s a real and possibly imminent threat. Accidents and illnesses can lead to temporary or permanent disability at any time. Also consider the fact that 10% of Americans 65 and older have Alzheimer’s disease. That means that in many cases, those parents will be unable to make decisions about their own care, let alone see to the needs of children who depend on them.

For a parent of a child who has special needs, this situation may seem like fate piling on. Yet preparation can be a sign of deep love and responsibility. Failure to prepare for all possible contingencies could lead to financial and emotional devastation for everyone involved. Other family members may be powerless to intervene, leaving courts to make decisions.

Too often, incapacity planning is reactive, says Dan Griffith, senior vice president and director of wealth strategy at Huntington Private Bank®. “Something catastrophic has happened and now we need to do something about it,” he says.

That’s difficult and emotionally taxing at any time—and may not be possible at all if parents are incapable of participating to create a solution.

Getting things right may be especially fraught when the future welfare of children is at stake.

“Parents never stop worrying about their children,” says Griffith. “But the things that surround incapacity planning have extra emotion packed into them.”

Parents never stop worrying about their children. But the things that surround incapacity planning have extra emotion packed into them.
Dan Griffith
Senior Vice President and Director of Wealth Strategy, Huntington Private Bank
Talking about what-ifs

“This kind of planning needs to begin with discussions about hypothetical situations that might not be so hypothetical,” Griffith says. “It’s not just a matter of talking about what happens if you die or your cognitive faculties decline in old age, but also what if you’re in an accident and you’re in a coma for six weeks.”

Documenting your wishes

Several essential documents are likely to be part of that plan. Powers of attorney for financial and health care decisions are crucial, Griffith says. But one or more trusts may also be needed.

“If a child has special needs, a trust can establish what will happen in the case of your death or disability,” he says. “It designates a trustee who can stand in for you, and it sets out exactly what has to happen in terms of when and under what circumstances children receive financial and other kinds of support.”

Without a trust and other important documents in place, supervising your child’s care could be left to a court-supervised guardian, whose decisions are likely to be by the book, without allowances for things that may be extremely important to the child in question. For example, Griffith works with the family of a developmentally disabled child whose annual family visits to a theme park are the highlight of his year. His parents established a trust that earmarks funds to pay for the trip as well as for the cost of a caregiver and the expenses of other family members.

“The probate court is probably not going to allow something like that,” Griffith says.

In some cases, a formal special needs trust could be called for.

“Someone who has significant mental or physical disabilities may be eligible for government programs,” says Griffith. “These trusts are developed to make sure money is available to support a child without disqualifying them from receiving government assistance.”

Revisiting your plans

Like other kinds of financial planning, incapacity planning should be flexible. You’ll likely need to revisit what you’ve put in place, making adjustments as children age and the nature of their disability or other needs change, says Griffith.

Getting the advice you may need

Establishing just the right plan to help special needs children, no matter what happens to their parents, may require legal, financial, and insurance advice from experienced professionals. Connect with your Huntington Private Bank advisor to outline a plan that can help alleviate your own concerns and protect your child's future.


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Planning for Your Own Incapacity

Making difficult choices now, and making your wishes known, can help protect the finances and ease the concerns of you and your family.
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† Alzheimer’s Association, “2019 Alzheimer’s Disease Facts and Figures.”

Interview with Dan Griffith, Huntington Private Bank. September 2019.

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