Personal financial planning for families with special-needs members is becoming more and more crucial.  According to the 2000 U.S. census, one in five people in this country ages 5 to 64 have some type of disability.  The number of people with disabilities is growing.  No one knows if this is due to more accurate diagnosis, or something in the environment, or both.  For example, autism, once considered rare, now is diagnosed in one out of 125 births – and one out of 70 boys!  People with disabilities are living longer and more productive lives, which means they need more long-term care.

Challenges

Many parents of disabled children are not sure of the best way to plan for their family’s needs.  Two of the biggest challenges these family’s face is first, how much money will be needed to care for their child; and second, who will take care of the child when the parents are gone.  Family members often feel that the best thing they can do is to open an account in the disabled childs name and put as much in it as possible.  While it is wise to save as much as you can for this person, having it in their name can cause problems when you later try to apply for Social Security, Medicaid, and all kinds of other social programs that are available to them.

Most people with disabilities cannot get their own health insurance.  If they are able to buy it, it’s very expensive and will come with pre-existing conditions exclusions.  The maximum coverage amounts are also often too low.  Because of this, many of these people end up having to apply for Medicaid.  With Medicaid they lose the ability to see any provider that they want to, and they often can’t go to the specialists that they really need to see.

Solutions

If you have a special-needs family member, the first thing you should do is to sit down with a financial advisor who is familiar with this type of planning.  This type of personal financial planning involves a mix of social work, life coaching, and finances.  It will also involve working with a special-needs attorney to draft the proper documents that will protect your loved one and your resources.  A good attorney like this will be able to give a lot of direction on things you can do to protect your family.