We all know that a college education is expensive, but did you realize that if you have a child with special needs those costs could nearly double?
The American College of Financial Services in Bryn Mawr, PA found that the average cost of rearing a child from birth to age 18 is about $250,000. However, rearing a child with special needs can easily be more than double that amount. If you have a child with special needs, then you should have a plan in place to help you address the unique financial and other challenges that go with providing care for your special needs child.
Working with a team of different professionals can help parents manage both the financial and non-financial aspects of providing care. Here are some of the key roles:
Caregiver. Working with a caregiver can help manage the challenges of providing care and addressing everyday responsibilities. The cost will be commensurate with the level of care required, so determining the need will be important for creating a budget.
Estate Planning Attorney. A lawyer who specializes in estate planning can help create a special needs trust to shield assets for a beneficiary with special needs while preserving her ability to qualify for government programs. An updated will and living will with the names of a guardian and trustee will also be crucial to be sure that care is provided for in accordance with your wishes. A letter of intent can also be a helpful document for caregivers. It’s not a legally binding document, but it can provide important information like medical history, family history, information about your child’s preferences, and your wishes for the type of care they should receive.
Accountant. As a provider of care to a child or dependent with special needs, you may qualify for tax deductions for medical expenses, tax credits, and tax-advantaged accounts. For individuals disabled before the age of 26, a 529A account can provide tax-free growth and use of the money to improve health and quality of life.
Financial Advisor. A financial advisor, who specializes in working with families that have special needs children or dependents, can provide specific recommendations on how to fund and protect accounts for disabled dependents.