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

Planning for a child is always a parent’s utmost priority.  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.

However, when the child has additional needs, it is inevitable for the child to exert a certain degree of dependency on the parents – physically, emotionally and financially. In such situations, parents have to plan for their own needs and plan to support their children’s current and future needs.

This requires a certain amount of planning to organize proper provisions for your child’s secure future.

Financial planning is a 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 may have the ability to foresee financial planning for the near and distant future. 
• Planning for a child with additional needs requires intensive planning since several factors have to be considered such as cost of education, therapy, care and specialized care as needed. 
• Planning without expertise can be a hindrance to leading a financially secure life. 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

1. Children with special needs may need additional help taking important decisions such as financial planning, even when they become adults. They will need their parents or guardians to make plans and decisions on their behalf.  Unlike typical scenarios, they may require ongoing guidance and support in making important life decisions.
2. Meeting everyday expenditures for your child is expensive. Services availed such as inclusive education, rehabilitation and recreation, support requirements in the form of regular therapies often create additional expenses. Meeting these expenses can often seem daunting, but not impossible if a good planning practice is in place.
3. Parents of children with additional needs have to plan more than their own finances, post-retirement. The retirement savings isn’t just meant for meagre everyday expenses for them, but must also include money available for the child’s (who is now a dependent adult) expenses as well. 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 child, who might have a significant dependency on their parents.
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.

• If my child is still dependent on me as an adult, how can we make sure that we are able to meet their expenses while supporting ourselves?
• Will we be able to meet support for my child meaningfully providing for all their requirements?
• How can we create financial support for my child’s future?
• Whom can we trust in our absence with important decisions?

Parents of children with additional needs will always have these pressing questions on their mind. 

Taking the first step toward financial planning is therefore essential. Not knowing what to plan or where to begin creates confusion for parents. 

Understanding your own family’s requirements

Planning should be started keeping in mind that there are two generations involved. 

1. Firstly, parents have to plan for the special child’s lifetime care. 
2. They must plan guardianship for their child when the parents are no more.
3. 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, should be considered.
4. 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 two generations are considered together, a complete financial plan for a special needs family has been set in motion. 

You can also read about drafting a letter of intent – This one document passes on vital information about your child to the future caretake.

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

If you’re seeking more information and guidance on this topic and related areas, Nayi Disha’s Know Your Rights (KYR) Program is here to support you every step of the way. By joining, you’ll gain access to valuable resources on government schemes, benefits, financial support, legal rights, and more, all aimed at securing a brighter future for your child. To learn more, visit our chatbot by clicking this link: https://bit.ly/4dJVCP3, or simply type ‘KYR’ on our helpline number 844-844-8996.