All parents worry about how their children will live and thrive in adulthood. For parents who have children with special needs, those concerns are all the more pressing. Depending on the disability, the cost of care for a child with special needs can be astronomical. For example, the advocacy group Autism Speaks estimates that the lifetime cost of care for a child with autism is between $1.4 million and $2.4 million.
Parents of kids with special needs are understandably anxious about how they'll pay for care today, as well as in the future. Here's what you can do to plan for your child's future and ease your own worries.
Look to federal programs
Your child may be able to access government resources to pay for their care — if you plan early. Programs such as Supplemental Security Income (SSI), Medicaid, subsidized housing and the Supplemental Nutrition Assistance Program provide aid to disabled individuals. However, these programs are means tested; you must keep your child's income and assets below a certain level to qualify.
In 2018, the maximum monthly SSI benefit is $750 for individuals and $1,125 for couples.
However, there is a limit of $770 a month in unearned income and $1,585 in earned income for singles ($1,145 and $2,335 for couples, respectively) to receive SSI. In addition, individuals can't have more than $2,000 in savings. Meanwhile, each state sets its own income limits for Medicaid eligibility.
Supplement programs with special needs trusts
A special needs trust allows your child to access these government benefits while still leaving private funds to supplement care. Money from the trust is not counted toward the programs' income or asset maximums.
“If she's ever in a group home, her brothers can use this trust to help take care of her and make sure she's comfortable and living a productive life," Ryan says about the special needs trust he has set up for Mary.
There are two ways to create the trust:
- At the time of your death: You can leave instructions in your will to fund the trust with assets from your estate. This is called a testamentary trust.
- During your lifetime: When a trust is created during your lifetime, it's called a living trust. The advantage to this approach is that your estate can avoid probate and other family members can contribute their own funds to the trust. It also allows your designated trustee to gain experience managing the trust under your watch.