When a family member has a disability or special needs, life demands more from you, as caregiver — emotionally, physically, intellectually and financially. Developing a holistic plan can help you prepare for the predicted and navigate the unexpected.
What does it mean to create a holistic plan?
A holistic plan is created for the lifelong care of your family member with a disability or special needs — especially after the caregiver is no longer able to provide care — and looks at all aspects of life from a personal, legal and financial perspective. Developed over time, it changes to adapt to new circumstances and needs. While the plan focuses on your loved one with a disability or special needs, it will benefit your entire family, as well.
The plan addresses five life stages that may require important planning decisions for both caregivers, and individuals with disabilities or special needs.
- Birth to age three: foundation
- Age three to 22: childhood and transitioning to adulthood
- Age 22 and older: adulthood
- Later in life and beyond caregivers' lifetimes
Beginning the planning process
After receiving a diagnosis of a loved one’s disability or special needs, families may require considerable time to accept and adjust to their new reality. However, once your family is ready, referencing the five life stages will help you evaluate your current financial picture and set goals to meet future needs.
Think about how your loved one’s needs might transition over their lifetime. Examine your spending habits, create a budget, anticipate how expenses will change, and establish an emergency fund account. Review all your accounts and policies that have beneficiary options and ensure beneficiaries are appropriately designated. Naming your loved one with a disability or special needs may jeopardize their eligibility for needs-based government benefits, so consider a special needs trust.
Create your plan with professionals — such as a special needs attorney, financial advisor and accountant — who are experienced working with the disabilities and special needs community. They will know the laws affecting you and the financial options available. They’ll also help ensure that all the elements of your plan work together, with legal documents drafted properly, so one doesn’t invalidate another.
Here are five life stage considerations to help you create your plan.
Birth to age three: foundation
Build a network
Benefit from the experience, information, resources and support you’ll find in the community. Reach out to friends, family, other families facing similar situations, your school’s special education staff and special education advocates, medical professionals, spiritual advisors, social services case workers, and organizations such as the Caregiver Action Network.
Some adult caregivers who have a partner may find it more practical for one to stop working to care for their loved one, rather than hiring professionals and managing time off from work for emergencies and medical appointments. Be sure to adjust your budget to a single-income household, if this is your goal. Consider available employee benefits that support caregivers, including flexible paid time off and caregiver coordination services, health savings accounts (HSA), legal services, medical coverage, and support services such as Employee Resource Groups and Employee Assistance Programs.
Learn your rights
Knowing your rights makes you better able to achieve your goals. Begin with these:
Research your state and county early intervention and disability programs and services including physical and speech therapy, counseling, assistive devices and more. Caregivers of children under age three who have concerns about their children’s development can ask their pediatrician for a referral to an early intervention program for evaluation. If eligibility for early intervention is established, an Individualized Family Services Plan (ISFP) will be prepared.
Letter of intent
The Letter of Intent (LOI) is a guidebook-like reference for future guardians and caregivers of your loved one that compiles personal, medical, financial and social information about your loved one and provides practical and vital information for when the original caregiver no longer is able to do so. As things change in your loved one’s life, regularly update the LOI to keep the information current. An LOI also allows families to capture the vision for their loved ones’ future. Get started by downloading the Voya Cares template.
Life insurance policies can be a fundamental part of a holistic plan. Life insurance policies can be used to fund a special needs trust or leave a legacy for other children, family members and charitable organizations. Pay particular attention to titling and ownership of policies, and especially who are named as beneficiaries.
Many government benefit programs based on your work history may benefit your family, such as Social Security Survivor Benefits, Social Security Disability Insurance (SSDI), Medicare, Childhood Disability Benefit (CDB) and more. Take the Benefits Eligibility Screening Test to determine eligibility.
Caregivers’ retirement savings should be kept separate from the savings for your loved one’s future life plan (if possible). A carefully crafted life plan that addresses each of the life stages will help ensure that a loved one’s living expenses are covered by their own earnings, savings, investments or retirement account, rather than the caregivers’ retirement savings.
Meet with a special needs attorney to create new or review existing legal documents including wills, medical directives, powers of attorney and trusts. Be sure any inheritance bequeathed to a person with a disability or special needs does not put at risk the financial strategy created for them.
Age three to 22 childhood and transitioning into adulthood
Public schools are mandated to provide education and accommodations for children with disabilities and special needs. Parents should collaborate closely with special education professionals in their school district to develop an Individualized Education Program (IEP) to help their child succeed in school. It’s reviewed and updated throughout the years and includes services for transitioning into adulthood. Private school costs may be eligible for tax deductions, consult a tax professional to see what expenses you can deduct.
Adult children who lack decision-making capacity may need a legal guardian when they reach the age of majority—which is age 18 in many states. Also consider who you’d want as successor guardians to would assume guardianship, when original caregivers no longer able to. You can document these wishes in your letter of intent or in your will. However, guardianship isn’t the only option for those who may need help making life decisions, consider a less restrictive choice, like Supported Decision Making or Powers of Attorney.
Age 22 and beyond: adulthood
Socialization and recreation
Socializing enriches lives. Social and recreational opportunities may come naturally during the school years but take conscious thought and planning during adulthood. Building recreational costs into the budget for the entire family, including for a loved one with a disability or special needs throughout their lifetime.
Depending on the degree of independence, planning should begin concerning where adults with special needs will live. Options include an apartment added to the family home, a separate apartment or home, an assisted living residence or a home established with other adults with disabilities and special needs. Residential needs can vary during a person’s lifetime, and options for persons with disabilities and special needs continue to evolve.
Many adults with disabilities or special needs may want to work when they are old enough. Investigate state and local nonprofit organizations and businesses offering programs to help adults with disabilities or special needs find and keep jobs, including job coaching and on-the-job support.
Consider transportation needs for school, employment or recreation over the course of a lifetime and build a plan that will help cover the costs.
Government benefits- public assistance
Supplemental Security Income (SSI), Children’s Health Insurance Program, Extra Help prescription program and Medicaid are a few of the programs that may be available for individuals and families with limited financial resources.
If an adult receives needs-based government benefits like Supplemental Security Income (SSI) or Medicaid, accumulating assets of $2,000 or more may jeopardize eligibility for those benefits. There also are income limitations for each government benefit program that need to be considered. Tools like ABLE accounts and special needs trusts can help maintain eligibility, in the event government benefits are needed, now or in the future.
While the family’s assets and income are considered while a child is considered a minor, when they reach age 18 (in most states), eligibility is based solely on their own income and assets. This means that many more individuals can access income and services after their 18th birthday, even if still living in their family’s home.
Social Security decisions
Deciding when to claim Social Security retirement benefits is one of the most important decisions many people make in their later years. When a caregiver claims Social Security retirement (or benefits begin due to disability or death of the worker), additional benefits may be available for their dependent adult with a disability. The Childhood Disability Benefit (CDB) can provide income that is approximately 50% of a worker’s full Social Security retirement payment during their life, and up to 75% as a survivor benefit after the worker passes away.
Saving for retirement is one of the most important financial goals for nearly all Americans, but for the disabilities community it may take on additional significance and challenges. Caregivers may need to save more for retirement to cover the additional costs associated with providing care during their retirement. People with disabilities who have employer-sponsored retirement plans, like 401(k)s, profit sharing plans or pensions, may have to reposition those assets upon retirement to preserve government benefits eligibility. Meet with a financial professional to make sure your retirement plans are in order.
Before a loved one finishes high school, consideration should begin concerning where they will live during adulthood. Options include an apartment added to the family home, a separate apartment or home, an assisted living residence, a home established with other loved ones of adult children with disabilities and special needs and more. Residential needs can vary during a person’s lifetime, and options for persons with disabilities and special needs continue to evolve.
An adult loved may want to work when they are old enough. Investigate local organizations and businesses offering programs to help adults with disability or special needs find and keep a job, including job coaching and on-the-job support.
If an adult receives needs-based government benefits, accumulating assets of $2,000 or more may jeopardize eligibility for those benefits. There are also income limitations for each benefit program that need to be considered. Even if a family hasn’t applied yet, planning ahead is advised, just in case government benefits may be needed in the future.
Later in life and beyond caregivers’ lifetimes
As we get older, the need for care — and for housing arrangements that provide the proper level of care — can increase. Make sure your plans include the cost of your own housing needs, as well as the unique needs of the loved ones for whom you provide care.
Given the rising cost of health care, choosing the right coverage is among the most important decisions to be made in and around retirement. This decision may include enrollment in Medicare and Medicare supplemental plans, employer plans or purchasing your own coverage through the health care exchange. If you choose a high deductible health care plan, and Health Savings Accounts (HSAs) may also be available.
What happens after the caregivers’ death
It’s difficult to think about what happens to our loved ones after we’re gone, but it’s critical to plan for continuity of care and resources that can provide the quality of life they deserve. Work with a well-qualified attorney to make sure your estate plans — including ownership and beneficiary designations — are up-to-date and will help ensure your wishes are carried out after your death. Creating a letter of intent and naming a successor caregiver can help secure your loved one’s care.
Special needs trusts (SNT)
SNTs can pay for certain living expenses that a loved one with a disability or special needs will have during their lifetime. There are different types of SNTs, and they have many sources of funding: gifts from friends and family, as well as inheritances from wills, life insurance policies, or other accounts or policies that are directed to the trust. Funds in a special needs trust typically won’t be counted when qualifying a person for needs-based government benefits. Unused funds, depending on the trust chosen, may be bequeathed to other heirs. A special needs attorney can explain the benefits of having an SNT.
Plan well, live better
A holistic plan developed taking into consideration each of the stages in a child’s life who has a disability or special needs can maintain and improve a family’s lifestyle and give loved ones with a disability or special needs a lifetime of support and financial security.