Ohio Department of Aging Aging Connection - September 2009

September 2009

Planning a Future for an Adult Child With Disabilities
Steps to Take Now to Ensure Their Tomorrow

Advances in medicine have allowed children with developmental disabilities and their aging parents to live longer. Among the many challenges facing parents of children with special needs is planning for the time when the parents will no longer be around to act as the primary caregivers. A generation of parents who have cared for their children with developmental disabilities at home now face their own old age and the prospect that their children may outlive them.

Currently, an estimated 717,000 adult Americans with developmental disabilities (including those with Down syndrome and autism) live with caregivers over the age of 60. In 2030, there will be 1.2 million people with developmental disabilities over age 60, according to U.S. Census figures, twice as many as in 2000. A move to home- and community-based care in the 1960s means many of them have always lived with their families.

As people with disabilities live longer, their need for services may continue for decades and increase as they age. Expenses will increase when care, management and guidance, previously provided by parents, must instead be obtained from a professional for a fee.

Government programs such as Medicaid and Supplemental Security Income (SSI) can help defray some of disabled adults' expenses. As of January 1, 2009 the federal monthly benefit is $674.

No matter how old the parents are, it's never too late to start planning for a child's future. The first step is to create a financial and legal plan for the child, according to AARP. If both parents die without a plan, the child becomes a ward of the state. The state will determine where they will live, who will take care of them and what type of lifestyle they will lead. This is not what parents usually want for their child.

To help develop a plan, AARP recommends:

1. Establish a special needs trust. To qualify for government benefits, a person with disabilities must not have more than $2,000 in the bank. A special needs trust allows a parent to set aside money for a child's future expenses without putting his government benefits at risk. A financial planner can provide more information about the benefits and different types of trusts available.
2. Name a successor guardian. This is the individual who will be responsible for making medical decisions for the person with disabilities.
3. Create a letter of intent. To ensure that the person with disabilities is able to maintain his normal daily life, outline his daily routine. Compile a list of friends and activities, as well as doctors' names and medications.
4. Make transitions before the parents' death. If the plan is for a person with disabilities to move into a group home or other facility, having parents help make the move can make the changes easier and less frightening.
5. Write a will. Without a will, the courts likely will divide up the estate equally among survivors, with no accounting for a disabled child's special needs trust or the $2,000 rule regarding federal benefits. In a will, leave money to the child's trust.
6. Ensure that the child remains asset-free. Make sure all assets - life insurance policies, IRAs, annuities, pensions - specifically name the child's trust and not the child, as the beneficiary.
7. Budget for the future. The major factor in determining how much a person with disabilities will need is figuring out where he will live. Private-pay, assisted living facilities can cost $3,000 a month. Costs can be minimal if a family member offers to take him in. Estimate an annual cost and then multiply that by the disabled child's life expectancy.

While securing your disabled child's financial future can seem like a daunting task, professionals trained in dealing with the specifics of special needs trusts, including elderlaw attorneys, can help. The Academy of Special Needs Planners and the Special Needs Alliance both can put you in touch with qualified experts.

Planning by parents can make all the difference in the life of the child with special needs, as well as in that of his or her siblings who may inherit the responsibility for caregiving.