Financial planning for your child with special needs is one of those things you may not have time to deal with—but you know you should, for your child's financial future and yours, too. And so, Dave and I bit the bullet and have been tackling it for the past half year with the help of Massachusetts Mutual Life Insurance Company (MassMutual) and SpecialCare financial planners Sal Salvo and Michael MacDougal, in a series of sponsored posts. These are the surprising things we learned along the way, and some of the excellent nuggets of info we picked up:
First off: Planning takes time
Trust me, I know this isn't something you want to hear (as if you have all that free time on your hands!) but it's the reality. Dave and I have sat through multiple meetings with the planners, more than expected. While Sal and Michael were clear from the get-go about the planning steps involved (at the first meeting, ask how the rest will play out), at one point I was feeling a little meetinged-out and so I asked to condense two meetings into one, which we did. If you are feeling overwhelmed, or not sure about info you've received, it's important that you speak up.
It'll take yet more time to review the advice you get
What helped me and Dave was setting up biweekly dates at night to go over things. We scheduled a running Tuesday get-together on our calendars and stuck to it, more or less. Helpful hint: Breaking out a nice bottle of wine sure can help.
Investment reminder: a diversified portfolio is really, really key
Dave and I also learned about managing our assets, including the importance of having a diversified portfolio. It's always important to talk openly with the financial team about your risk tolerance and ultimate needs as you shape your strategy.
Insurance FYI: one policy tweak to make
One great (and non-costly!) recommendation we got was to increase the umbrella policy on our home insurance. As Michael said, "It's the cheapest liability coverage in the world, and often people don't have enough of it."
Also: Beware putting too much money into 529 plans
Like many parents, we immediately signed our kids up for 529 plans after they were born. I did one for Max because I was determined to have that hope for him; he would go to college, no matter what the doctors had told us about cognitive impairment. It was an emotional decision, rather than a logical one. We later decided to end the plan and instead invest in other options. That's because 529 money is limited to educational use only; funds cannot be used for other important things like, say, medical care. In other words, putting all our eggs into one 529 basket was not a good idea.
You'll have to deal with wills, too
In addition to your financial team, it's important to also work with a qualified estate planning attorney. After an examination of our wills (which had been set up before both kids were born), the estate attorney found some glaring problems. Issues ranged from language that could disqualify Max for government assistance to tax issues that could arise upon the death of first spouse. And that, my friends, is an excellent reason not to use a Rent-A-Lawyer type to set up the wills through your job's legal plan. We got specific guidance on what needs to be fixed, and we'll be having new wills drawn up by a lawyer who specializes in planning for kids with special needs (that is very, very KEY).
As with everything in life, it's good to do research of your own.
There's a good chance a financial planner you will cover topics you know little about. When you look into the recommendations—assuming you go to reputable sites—you can further assess pros and cons, ask more informed questions, and make the best decisions for your family.
Get the scoop on Medicaid
Sal was particularly experienced with navigating Medicaid benefits for a child with special needs, because he has a daughter with Rett syndrome. What he told us was sobering: In our state alone, there are 8000 people with developmental disabilities on the waiting list for adequate housing. Gulp. Knowing the realities of Medicaid in your state can better help you plan for the future (and maybe strike the fear of God into you, too). (See above suggestion, re, bottle of wine.) For more info on benefits provided by Medicare or Medicaid (Medi-Cal in California), check out the Centers for Medicare & Medicaid Services. Medicaid guidelines vary by state; contact your local office for details.
Myths and realities about financial planning for kids with special needs
Trusts for kids with special needs: what to know, what to do
How your money personality affects planning for your child's future
This is the last in a series of posts sponsored by MassMutual, for which I received compensation. SpecialCare is an exclusive MassMutual program that provides access to information, specialists, and financial products and services.