Special Needs Children
Many parents with physically, emotionally or developmentally disabled children have not secured the child's financial future. A recent survey by Metropolitan Life shows that 60% of parents don't expect their child with special needs to be financially independent. Despite this candid acknowledgement, 68% of parents haven't written a will! and 29% have done nothing to plan for the child's financial future.
It's not that parents of special needs children don't realize they need information and help. But 2/3 of parents say that is little financial planning information available that focuses on children with special needs. Frustrated, 85% parents turn to their doctor for financial advice!
"It's not surprising that parents have little time to focus on the future," says Nadine Vogel, a MetLife's vice president, and the mother of two daughters who require special care. "But if they don't, the consequences can be life altering...It's not about lifetime care, but about quality of life."
MetLife's survey, "The Torn Security Blanket: Children with Special Needs and the Planning Gap," questioned 1,718 parents of children with special needs. The survey, conduced by NOP World, has a plus or minus 2% margin of error at a 95% confidence level.
According to the U.S. Census Bureau, about 10% of Americans between the ages of 16 and 64 suffer some form of physical, mental or emotional impairment. Many of them are outliving their parents thanks to improved care medical technology.
Parents should take basic steps to preserve eligibility for government benefits. They need to ensure that the child's assets don't exceed the federal aid limit, which would make the child ineligible for some government benefits. They need to structure special needs trusts to provide for their child and preserve assets for the child's benefit without running afoul of federal or state eligibility rules.
- The MetLife survey found:
- 88% of parents who have children with special needs haven't set up a trust to preserve eligibility for benefits such as Medicaid and Supplemental Social Security.
- 84% haven't written a letter of intent outlining an agreement for the future care of the child.
- 72% haven't named a trustee to handle the child's finances.
- 53% haven't identified a guardian for their child.
The survey found that 32% of parents spend more than 40 hours per week with their special-needs child, or time equal to a second full-time job.
Parents spend an average of $326 per month, or just under $4,000 per year, on out-of-pocket medical expenses on their special-needs children.
