Financial planning for your child with special needs - future planning is essential and urgent.

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  • Planning for the future of one’s children is the top priority for any parent.  Every parent wishes for their children to become independent and fully capable of their own self-care.  Once the children take charge of their lives, their parents can take the liberty of planning their own retirement. But when the child has special needs, the situation is not a typical one. In such a situation it is inevitable for the child to exert a certain degree of dependency on the parents - physically, emotionally and financially. Thus, it requires a certain amount of planning to organize proper provisions for your child’s secure future.

    FINANCIAL PLANNING IS NECESSITY AND NOT AN OPTION
    Managing one’s own finances needs expertise and time.  Not every parent of a child with or without special needs will have the ability to foresee financial planning for the near and distant future. Further, planning without expertise can be a hindrance to leading a financially secure life. Several factors such as, lack of or limited awareness of existing resources, government support and trained advisors prevent families from actively engaging in financial planning for their child.

    KEY POINTS TO CONSIDER BEFORE FINANCIAL PLANNING FOR YOUR CHILD

    Many families are unaware of financial and legal matters that are of utmost concern for a child with special needs.
    Here are few of the issues which are to be considered by every parent of a specially-abled child -

    1. Your child will require lifetime support with regard to both personal and financial matters. Your involvement is not restricted to a couple of years till he/she starts becoming financially independent, as is the case in a typical scenario.

    2. Meeting everyday expenses for your child is expensive.  Expenses pile on due to services availed such as inclusive education, rehabilitation and recreation, support requirements in the form of regular therapies. Making ends meet to meet these expenses is hard, but not impossible if a good planning practise is in place.

    3. A parent needs to consider his/her finances that are available to meet everyday expenses, post-retirement. The retirement savings isn’t just meant for meagre everyday expenses, but must also include money available for the child’s (who is now a dependent adult) upkeep. Parents must assess their pension income and retirement savings, and study if it would meet the future lifetime expenses of their own selves and their dependent child.

    4. Estate Planning is a very important aspect of planning your child’s future, to ensure the child is reasonably secure when the parents are not around for their care. Understanding the mode of distribution of assets for your loved ones, setting up legal guardianship, formation of a trust, writing a Will are issues which need to be addressed.

    The above factors highlight the need for immediate financial planning. Not knowing what to plan or where to begin creates confusion for parents. Understanding your own family’s requirements is the first step towards financial planning. Then planning should be started keeping in mind that there are 2 generations involved. Firstly, parents have to plan for the special child’s lifetime care. They must plan guardianship for their child when the parents are no more, of how the child’s needs would be met, where the child would live if parents are no longer there to support the child, and other practical issues. The other planning that parents have to undertake is for themselves, especially their own care and retirement.  As highlighted above, a parent’s retirement is not only about meeting their expenses but creating a provision for the child’s expenses too. When the planning for these 2 generations are considered together, a complete financial plan for a special needs family has been set in motion.

    DISCLAIMER: Please note that this guide is for information purposes only. Please consult a financial advisor for any legal consulations or advise pertaining to your needs.

    How do you draft a letter of intent? - This one document passes on vital information about your child to the future caretake.

     

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