What kind of savings plan?

[marieangela]

We have college savings plans for our two boys and want to start some sort of savings plan for our 20 month old daughter who has cri-du-chat syndrome. I'm sure there must be some special type of savings plan that is good for a child with special needs, but I don't even know where to start looking. Does anyone have a good savings plan for their child that might work for mine?

[2boyzmama]

I don't have an answer right now, but I'm going to talk to my mom. She's a guardian for an adult family member, and she's also a social worker for adults with MR/DD so she knows a lot. The thing to take into account is that there might be an issue if there are assets in her name when she turns 18. Usually SSI and/or some form of Medicaid takes over a lot of the financial/medical care of disabled adults once they turn 18, so whatever assets that person has matter then.

I'm going to talk to my mom, because this is something we need to consider as well. We don't know yet whether Connor will be independent as an adult or if he will require assistance (and if so, at what level). It seems that the norm is for some level of assistance to be required for adults with his syndrome, so we need to start looking into these specifics ourselves.

[~cassie]

I JUST read an article somewhere about this, it didn't give any specific accounts, but did say that there are "special need accounts" that can be used for the child without affecting their disability, etc.

[anj_rn]

What you need to do is set up a Special Needs Trust. It has to be done by an attourney, but a I know there are ones that do it pro bono. The trust has limited access (you can only use it for certain things, ie therapy, medical bills, equipment, comfort devices, education, not food/clothing/shelter which would be covered by social security). the trust does not count as income or as a savings account the same way a normal trust or account would, so it will not influence medicaid or social security applications. You state when starting the trust who is in control of the trust, and who else could access it. It requires signed contracts from anyone you list as well as an annual report of the status of the trust to those people. You do list who would be the beneficiary of the account should the child pass or no longer meet the medical requirements of special needs.

We have one for our DD, so PM me if you have specific questions.

[emilysmama]

The previous poster is correct about the Special Needs Trust. You want a very reputable lawyer who specializes in Estate Planning. Most of these work with senior citizens who are thinking about eventually entering a nursing home and want to preserve their assets to pass on to their children. So you might not want any old estate planning attorney. I think you would lean towards an estate planning attorney who has experience with special needs trust, since I doubt all estate planning attorneys have that type of experience.

But as to how a trust works, there should be some similarities between what senior citizens want, and what special needs want, in the respect that a trust is a trust. It's just that your child's needs are different from what a senior citizen needs.

Setting up the Trust is kind of like inventing a totally different imaginary person, who you give control of the money to. You can be the trustee while you are living, and make all the controlling decisions about how the money is spent, distributed, and invested, but it is the "trust" that the money belongs to.

But the actual savings vehicle still needs to be chosen. I.e.Once the trust is set up, you still need to pick a brokerage firm or a mutual fund company, and fill out an account application form, just as if you were going to invest your own money to, say, save up for a vacation for five years from now. The only difference is that you won't be the name of the account owner, the trust would be the name of an account owner. It's important to open the account correctly, which means that you have to get the correct application form (called a trust account application form), not the usual regular account application (called an individual or joint account application form). Although setting up the trust requires an attorney, opening the trust account at the investment company of your choice doesn't require a lawyer, just a lot of time Q&A on the telephone with the investment company to fill out the correct application form in the correct manner. These investment companies are more than happy to spend hours on the phone to answer your questions, no matter how simple a question, because it is in their best interest to get you to put your money with them. In fact, it would be unethical for the attorney to suggest to you the investment company or what to invest the money in. I, on the other hand, would suggest a low commission mutual fund company like Vanguard, TIAA-CREF, and/or Fidelity. I advise against hiring a financial advisor to charge you large fees to invest your money the way you want.

Once the trust account is open, you buy and sell stocks or mutual funds, just as if the account were your personal vacation investment account. It's just that you are acting as the trustee in the transaction, but you perform the actions exactly the same.

So, like the pp suggested, a good start would be to understand the concept of a trust, specifically a special needs trust. So google "trust fund what" for starters, and read up on it until you feel comfortable with the general concept of a trust. Then google "special needs trust", and read up on how special needs make your situation a little different from that of senior citizens.

[marieangela]

Thank you very much for the replies. I will look into Special Needs Trust.

[oiseau]

I heard a story on NPR a couple weeks ago that mentioned a new type of savings account in Canada specifically for people with special needs. I don't know if the US has anything like that though. Here's the link to the article: http://www.npr.org/templates/story/s...ryId=130326842
The organization (PLAN) they profiled sounded really awesome and I was really impressed by the support they provide for families.