Financial planning for special needs child can be something that parents or guardians start to think about. The high cost of care and therapy and special education and others in the long term should be considered.
Because parents and guardians aren’t always there for the child, do these financial planning tips to meet children’s finances sustainably.
A Practical Guide to Financial Planning for Special Needs Child
Understand the Child’s Complete Needs
In planning finances for children with special needs, the first thing to do is understand the type of special needs. Children can have special needs in terms of physical or intellectual, but some experience obstacles in their development. Or, the type of condition where the child experiences a combination of special needs that makes his life more limited.
Therefore, understanding the type of child’s complete needs helps you in long-term financial planning. From the type of child’s condition, you will know whether he can live independently, semi-independently, or will need lifelong support. The estimated cost of therapy and treatment to special education and daily life can be calculated.
Do Long-Term Investment
One of the best ways to plan finances to meet the needs of children with special needs is long-term investment. There are a series of long-term needs in the welfare of children who grow up with worse limitations. Children who are unlikely to be able to continue living independently or semi-independently need this fund the most.
Investment accounts for disabled child can be in the form of instruments such as mutual funds that have low risk. However, if your income is large and stable, long-term stock or property investment is another idea that can be implemented. In addition to considering the needs of children, also consider the inflation factor in choosing investment instruments.
Create Budget and Emergency Fund
Another way to plan your finances is to create a budget and emergency fund that are useful at any time. Both the short-term and long-term needs of children with special needs can be met well through both. So, create a monthly and annual budget to meet your child’s needs so you can relax without worries.
The benefits of an emergency fund for anyone remain the same, including for children with special needs. Meeting needs for unexpected situations is the goal of planning and creating this emergency fund. Prepare an emergency fund of 6-12 months of expenses so that you don’t need to take from another fund.
Create Special Needs Trust
Special needs trust is a complement to government assistance to finance the basic needs of child care and upbringing. The assets in the trust are managed by a trustee, could be an individual or a professional institution as manager. This aims to avoid misuse of funds only if the child is unable to manage their own finances.
With SNT, funds held in the trust aren’t counted as the child’s personal assets, so they remain eligible for assistance. SNT can also be valid for the child’s lifetime, and even regulate the distribution of assets after the child dies. SNT is also a means for parents or relatives to leave an inheritance, not directly to the child.
Rely on Insurance
The presence of insurance in financial planning makes all parties more at ease because of long-term financial security. There is life insurance which is very important so that children continue to receive financial support if their parents die. Meanwhile, health insurance is also needed for routine and maximum therapy and care for children.
Make A Will
Financial planning for special needs child benefits by making a will is useful for regulating the distribution of assets responsibly. A will is also a detailed guideline for child care, such as the child’s habits, therapy, or type of school. It’s also very helpful in avoiding family conflicts over the use and division of assets.
Involve Professionals
In financial planning, anyone can be a beginner and not understand the ins and outs of how to do it. Therefore, you may need the help of a professional who understands the conditions of children with special needs. Generally, lawyers and notaries are needed in making wills, preparing the legalities of inheritance, and appointing a guardian.
Financial planning for special needs child helps them to live well and receive proper treatment in the future. Children can continue to live prosperously without relying on other siblings, especially when parents can no longer care for them. Proper financial planning is also useful in preparing trusts and wills so that assets can be managed properly.
