Financial planning is daunting enough, but it becomes more complicated and critical when you have a child or family member with special needs.
If you don't leave any money or support in place, their fate may be left up to the court and wellbeing could suffer. If you leave too much, they could lose access to critical government services or be forced to pay back the state for some of their care.
It's never too early to get started, and it's also never too late, said John Nadworny, Cynthia Haddad and Alexandria Nadworny, the special needs financial planning team at Shepherd Financial Partners.
The worst mistake you can make is having no plan. This sometimes happens because it's so overwhelming it prevents a family from planning at all. But it doesn't have to be a massive undertaking in every case, said Nadworny: a young family may just need life insurance and an estate plan. What you need can evolve over time.
Don't overlook estate planning if you have limited means either, it's critical to put basic safeguards in place if someone relies on you for care.
"If there's no plan, it's chaos," said Haddad.
If you do only one thing, write a letter of intent.
The letter outlines a family's hope for an individual and their estate. It communicates your vision for the child or family member's life, who will be involved and how. It can also include critical information about medical, financial or other essentials, such as the individual's daily routine, likes and dislikes. Update it annually.
All the money in the world cannot provide the information that parents may have in their hearts and minds for their children, Nadworny said.
Best of all, it's free.
It can be very complex to navigate what is needed for each family's unique situation.
Get help in whatever form you can. James Fox, an AXA Advisor and special needs financial planner, suggests asking other families with special needs their input or looking into free training through advocacy groups or support groups. This is a situation where a paid professional, such as a certified financial planner with a special needs designation or a disability law attorney, can be critical.
They can walk you through the ins and outs of various financial tools available, such as special needs trusts, ABLE accounts and more. Commonly used financial tools, such as life insurance and Roth IRAs, take on new weight for families in this situation. They will have special insight on the implications the various tools will have on taxes, government benefits and more.
Look for a fee-based professional, versus one who gets paid for selling products.
And don't overlook your own financial wellbeing. Fox said that if you forgo taking care of yourself, it may mean you cannot provide the care for your family that you hoped for.