Here we are giving you list of questions asked by special needs children families –
How Financial Planning helps?
Having a special needs dependent means one has to plan for 2 generations- The Child and Themselves. Considering that the special need may be dependent for lifelong the later years of life gets more painful if not planned ahead. The recurring expenses related to the child are much higher than a traditional planning. We have seen in many families this expense takes almost 40-50% of the household budget which put a very high financial constraints to the family since there are other goals to meet. All these situations demand planning ahead so that within these financial constraints the allocation for resources can be more efficient.
We have bought an insurance policy but haven’t disclosed child disability. Is it right?
Any preexisting illnesses or any other disability need to be declared based on which company will decides to give you the insurance coverage. If this has been hidden from the company then there is a higher probability that your claim will be declined. This is simply because you have hidden health conditions of the insured. Most of the insurance companies do not cover special needs children yet. In such situation the hidden fact will be looked at misrepresentation of fact and any claim will get decline even for other members.
Whom we can appoint as guardian of the child?
It’s important to give careful thought to who will have responsibility for your special needs child after both parents are gone. While the laws regarding a guardian are not specific to states, this is the individual who will care for your child and manage their affairs when you’re no longer available to do so. This a guardian has to be someone who understand the needs of the child well. If he is a non-family member then you may have to involve him/her on your child affairs so that the child requirement can be understood well by the guardian.
Ideally a sibling or a close family member can be appointed as a guardian. But if not available then family friends can also be appointed as the guardian of the child provide care is taken to aware them about the child needs.
How creating a Trust Will benefit?
In most pf the cases special needs children are dependent on someone for their decisions. Till parents are managing affairs there is no issue. But when they are not three then who should look after them for their lifetime and how to ensure the assets left for the child actually utilized for his/her benefit are the two major concerns. This can be achieved by formation of a private trust. It’s a separate legal entity where the assets are not owned by any individual but the Trust. The appointed trustees manage the affairs of the trust as per the guideline laid down in the trust deed. All the income from the assets is utilized for the beneficiary who in this case is the child. Thu trustees may change but the trust remains till the benefciary is alive.
How we can ensure the Trust takes care of child needs when we are not there?
The trustees manage the trust affairs as per the rules laid down in the trust deed. So firstly the trust deed need to be drafted well in detail and specific as to how the expenses of the child will be managed, where the corpus of the trust can be invested, how will the asset of the trust be owned by trustees, how will the trustees make decision, will any trustee have veto power, when a trustee can be removed, who can be appointed s future trustees and various others specifications should be written very clearly.
The second aspect on formation of a trust is appointing trustees. The viable process for a special need parent is to have yourselves as the initial trustees. If any future trustees is identified he/she can be added as a co-trustee. This serves two purpose. One, it helps you in identifying the strength of the trustees you have chosen and second it also give an opportunity to the future trustee to understand the functioning of the trust. Also, create some document like letter of intent which has details about your child needs and which can be referred by future guardians when you are not there.
How much corpus we will need for our child care?
To identify what corpus you need for your child you need to understand your child life stages and his various needs. For example – how expenses vary when the child is 3, 16, 22 or above 40 years of age. This understanding will help you in identifying your child requirement more appropriately. You can then either plan for child expenses increasing at a defined rate of inflation and identify the corpus needed today. The figure may surprise you because you plan for your child lifetime and not for some specific years. These figures will sometime be very high considering the higher rate of inflation in some of the expenses you incur. The alternative to this strategy is to identifying the perpetuity of today’s expenses which become a minimum threshold for you to manage your special child needs affair.
If you have any question send it to us and we will include it in the list after giving you a solution.