Millions of American parents struggle with the day-to-day responsibilities of caring for physically or mentally disabled children, but often their biggest challenge is putting financial strategies in place to ensure that the kids are taken care of as they all grow older.
For Christine and Donald Kriescher of New Franken, Wis., that has meant getting guardianship papers in order as their son Nick, 19, who is severely retarded and suffers from obsessive-compulsive disorder, approaches adulthood. And they'll need a power of attorney to help guide 20-year-old daughter Kandy, who has mild cognitive disabilities, into new programs next year when she leaves school.
In addition, the Krieschers plan to redo their will and set up a special needs trust to transfer their insurance and savings to care for the children after their deaths.
"I will die a happy person if I can find a way so they can live and be happy and be productive, too," Christine Kriescher said. Kriescher, who is 42, added: "Putting things in place gives you peace of mind."
The U.S. Census Bureau estimates that more than one in 10 Americans between the ages of 16 and 64 suffers from some physical, mental or emotional impairment. Finding the right services — and arranging future financial support — for them can be tricky because parents can't risk jeopardizing a disabled person's public benefits.
Many of the disabled qualify for government-sponsored care or training programs. They also can get financial help through the Supplemental Security Income program, which provides a monthly allowance and generally ensures that the disabled person is eligible for important Medicaid health benefits.
But that assistance could be cut off if parents or well-meaning grandparents give a few thousand dollars to a disabled grandchild, unwittingly making them ineligible for SSI and health care because their assets surpass the $2,000 limit, according to the ARC of the United States, a national organization based in Silver Spring, Md., for the mentally and developmentally disabled.
A growing number of insurance and brokerage houses have set up units focused on financial planning for special needs children, including help in setting up wills and trusts that don't threaten a child's benefits.
Nadine Vogel, who helped set up MetLife Inc.'s Division of Estate Planning for Special Kids, or MetDESK, in 1998, knows first hand what challenges the parents of disabled children face. Her first daughter, Gretchen, who is now 13, was born with serious disabilities that have required physical, occupational and speech therapy. A second daughter, Rachel, 5, has a heart condition.
"Dealing with the legal and financial complexities in estate planning — including life insurance, trusts and taxes — can be daunting," Vogel said.
Ken Wirtz, a MetDESK agent who has worked with the Krieschers in Wisconsin, said that in addition to financial guidance, he keeps up with community resources that can be of help to parents.
"Most of the parents are more worried about the children than themselves ... so we need to assess the overall situation and determine how we can support the parents so they can physically and financially take care of their children, even after they're gone," he said.
Michael Byrne, a financial planner with Lincoln Financial Advisors in Cherry Hill, N.J., said he got involved in assisting families with special needs "after watching my mother, who is 74 now, working to keep my brothers qualified for benefits as the rules kept changing." Two of his brothers, he said, suffered brain damage when a genetic disorder known as PKU, or phenylketonuria, was not diagnosed at birth.
Byrne also has a 14-year-old daughter, Kelsey, who was born with Williams syndrome, a form of mental retardation.
He said that the prayer of parents with a special needs child is simple: "We wish for the child a long and happy life — and wish that we can live one day longer."
But that generally doesn't happen, so parents often need to put wills and special trusts in place to ensure that their kids are cared for.
Special needs trust
One of the best things a family can do is to set up a special needs trust. Also know as supplemental needs trusts, they allow parents to leave assets for the disabled child — for transportation, recreation, vacations, a personal-care attendant — without disrupting the government benefits the child may need to survive, Byrne said.
Families also need to consider the financial demands of their non-disabled children, putting college savings plans and insurance coverage in place for them.
Richard and Christine Harrison of Mansfield, Mass., have worked hard to plan for the needs of their two daughters, Julia, who is 5, and Katie, who was born with Down syndrome three years ago.
Katie requires medication for a thyroid disorder, and the family has invested in speech and physical therapy for her, including sign language classes that allow her to communicate more easily.
The Harrisons recently purchased an insurance policy; if something happens to them, the money will go to a special needs trust for Katie.
"That life insurance policy is a way of saving for Katie," Christine Harrison said. "At the same time, we've saving for Julia's future by saving for college.
"In a way it's the same goals, but different plans of attack."