Short/Long Term Planning for Young Child with Special Needs

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3CheersforLkyJack
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Short/Long Term Planning for Young Child with Special Needs

Post by 3CheersforLkyJack » Thu Sep 27, 2018 2:06 pm

DW and I have two children. Due to developmental delays, a specialist developmental doctor believes our youngest son, age 2, to have some degree of intellectual disability. As he is so young, the degree is unknown. It could be autism, it might not be. He is perfectly healthy otherwise. It is possible that he goes on to be able to live on his own with minimal assistance, but again due to his age we can't tell at this point. DW and I both believe he will need some assistance in the future.

He has been approved for Medicaid (received a waiver in our state for children with special needs intellectual disability) and fortunately his therapies, etc. are covered at minimal cost to our family. We could afford these therapies, but a large financial burden has been lifted there.

Ages: 34 and 33
Household Wage Income: $150k
State: Iowa
We are maxing annually both his 401k & Roth IRA, her 403b & Roth IRA, and HSA.
Pensions: His cash value, her's 60% after x years of service (think public worker)
College: 3k per year per kid into 529. For younger son we have stopped making these contributions.

Due to this news, I just took out a $1.5m 20 yr term policy on myself ($600/yr). Also have employer provided on both, 1.5x salary him, 1x salary her. We stopped making monthly contributions to the younger son's 529 (current balance $14k) and UTMA (current balance <$5k) accounts. For the time being we have just been making the same monthly contributions into an online savings account in our names, earmarked for our younger son.

We live frugally, but are not cheap. I have no concerns with our current assets and life insurance providing enough for the family or children should I pass in the next 20 years. After that is when I get nervous. We save very well and are much better off than most for our age and income and should have significant assets in 20 years, but what if something wiped us out at age 65 and nothing was left to provide for our youngest?

-What steps do we need to take now?
-Start contributing to an ABLE account?
-Roll 529 to ABLE?
-Change my 20yr term ($600 annually) to 30yr term ($1,100 annually)?
-Meet with our attorney and setup a special needs trust but don't fund it?
-How to provide money after the term life expires?

I will monitor responses and provided additional information as needed. Thank you.

bsteiner
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Re: Short/Long Term Planning for Young Child with Special Needs

Post by bsteiner » Thu Sep 27, 2018 2:18 pm

3CheersforLkyJack wrote:
Thu Sep 27, 2018 2:06 pm
...
set up a special needs trust but don't fund it?
...
You can put that trust in your Will. While you're alive you'll provide whatever you want to provide for him. You probably won't have a taxable estate so you don't need to make gifts now. You can revisit that if you expect to have a taxable estate.

The trust for the child with special needs is for the most part the same as the trust for the child without special needs. The principal difference is that the child with special needs usually won't have the same degree of control (or may not have any control) over his trust. You should consider who should control his trust.

You'll probably include supplemental needs language since everyone expects to see it. But that's probably superfluous. The key is to make sure he's not entitled to anything from the trust. But you'd probably do that for your other child as well.

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3CheersforLkyJack
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Re: Short/Long Term Planning for Young Child with Special Needs

Post by 3CheersforLkyJack » Thu Sep 27, 2018 2:23 pm

That supplemental language is necessary so that he isn't disqualified from government benefits, correct? He currently qualifies for Medicaid.

Our attorney said updating our current wills to include special needs trust would run around $1k. Seemed reasonable.

Thank you.

Tachyon
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Re: Short/Long Term Planning for Young Child with Special Needs

Post by Tachyon » Thu Sep 27, 2018 4:05 pm

I may get lambasted for saying this on BH, but having a child with special needs that may need special care after you pass is one of the reasons whole life insurance makes a lot more sense than term. And do it now while you are young.

Peppergrass
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Re: Short/Long Term Planning for Young Child with Special Needs

Post by Peppergrass » Fri Sep 28, 2018 12:16 am

I'm dealing with the same

if I can speak on autism for a minute, as we knew our kid had it the second he was born.. don't ask us... autism would generally start out and this is in general... no speech at that age even, delayed walking, delayed eating of foods, extremely light sleeper and has trouble sleeping like 10x over a normal kid, extremely fussy in general, extremely intelligent, has a fixation to like one toy, has extremely odd habits, can go from level 1 to level 10 anger on a switch if something is not done right, usually has an insane memory recall from one instance.. if you can look back to when they were born they should have just displayed a sign of discomfort in their beginning life.. most this is from observation but I know someone who was able to successfully diagnose an autistic kid from a 2 week old video of them ( they have the magic touch and are in tune... they told me the main thing is a look of discomfort in their eyes when they are extremely young ) , also at age two you should see some signs of difficultly going to the bathroom ( number 2.. ). if you have an older kid, you should basically be saying " dude, why is this kid so different and harder then my other one"

obviously I am not a autism specialist.. what I can tell you is to BE AWARE that 95% of people in this field are going to do more damage then good. they just don't understand the needs they need, as they are more intelligent then people think. second if he/she is autistic, they are incredibly smart people who just see things a little different, that's it.. they are normal people and can absoutley thrive given an environment where their needs are met ( and this I am talking one parent being home and in-tune with them at all times... there is no other way for success that I know or have read about ) it's for sure a life changer if you want to do it right..


of course is there many things that can mimic autism in children, and they are absurdly more rare.. I can't begin to tell you where to start but to follow your instincts and never just trust a doctor because they are a doctor.. you are their parent, you will always know more then them as it is your kid..




to how to setup, we are going with a special needs trust.. I think the main advantage you have as having two kids, is later down the road if they are "special needs" to make sure the older one knows their place and responsibility to help out their sibling and be there for them.. this I don't have with my setup.. I can't fathom kicking it when I do and leaving them "on their own" but I think the best one can do is to have a support system where they are taking care of and not left to some outsourcing for their needs.. also it is reported "special needs" people are more abused as in a general then other people, they apparently and some sick people look like an easier target, which is why I would avoid at all costs outsourcing if possible as if you want something done right... do it yourself..

OnTrack2020
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Re: Short/Long Term Planning for Young Child with Special Needs

Post by OnTrack2020 » Fri Sep 28, 2018 6:35 am

Our youngest son was diagnosed with a developmental disability (austim spectrum) when he was around age 2. He is now 19 and in college, drives back from college (it's not that far) on the weekends to work at his part-time job.

We have never had any 529s for any of our children. We've always put funds allocated for their education into taxable accounts (mutual funds). That way we figured that any funds not used for education could go toward housing.

We have no ABLE account. One of the reasons we decided against it, and you will have to read up, is that any funds in an ABLE account (if the disabled person passes) must be used (at least in our state) to pay back Medicaid. But you can use this account for qualified disability expenses.

I might go with a 25-year term life insurance policy.

We also have a special needs trust (but for one of our other children). We don't have one for the son I mentioned above. He's very capable of earning money (even if it's not that much right now) and managing money.

Don't let the disability consume you. Right now, enjoy your child. You will know more around middle-school and into high school.

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Re: Short/Long Term Planning for Young Child with Special Needs

Post by 3CheersforLkyJack » Fri Sep 28, 2018 9:13 am

Curious what the best method is to make sure a special needs trust is adequately funded, if needed. Have heard of 2nd to die whole life policies, but not sure how expensive they are. If a $500k-$1m policy costs $15k a year or something (I have no idea of cost) I'm wondering if it is better to just save separately instead of paying that annual premium.

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3CheersforLkyJack
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Re: Short/Long Term Planning for Young Child with Special Needs

Post by 3CheersforLkyJack » Tue Oct 02, 2018 11:02 am

Should I change my 20 year term to 30 year term? Would cost us about $500 more per year.

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