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Financial Planning for Special Needs Families

 Jun 1, 2017 2:00 PM

financial planning for special needs families

If you have a child or other family member with a disability, I can relate. 

My wife and I have 2 adult children with special needs. We’re familiar with the reality of living this experience, versus simply reading about it. We know how much you love your special needs child, but understand how overwhelming and complicated it is to care for them and properly plan for their future.

Every family’s lifestyle and financial issues are unique. Yet every parent, regardless of their situation, has dreams for their children. Here are 3 financial planning suggestions to ensure your goals for your special needs child become a reality. 

3 Things to Consider About Financial Planning for Special Needs Families

#1 Hire the Right Financial Professionals
In addition to securing proper medical care for your child and providing them with a suitable education, surround yourself with the right legal and financial professionals, including a lawyer, an accountant and an investment planner.

If you don’t already have access to these services, ask friends, family and colleagues for recommendations. It’s not essential these professionals already have experience dealing with families who have children with disabilities; however, it is essential you are comfortable speaking to them about your family’s personal and financial situation.

#2 Get Your Affairs in Order
Perhaps the biggest worry for parents of special needs children is who will care for their child when they’re no longer able to provide for them. It’s tough—and emotionally charged—to think about your future demise.  

However, imagine the alternative: the stress on remaining family members if you pass away suddenly without adequate preparation.

For families with special needs children, an up-to-date will designates a guardian for your child’s personal affairs and a trustee for their financial matters.  If you don’t have a will, the government will appoint someone to make decisions about your financial assets. This person could also decide who will raise your child. And it can cost more—and take longer—to settle your estate when you pass away without a will. 

If you don’t have sufficient financial assets, life, disability and critical illness insurance are must-haves. Make sure you have enough insurance to care properly for your children if you pass away, become ill or if you are disabled.

#3 Apply for Disability Tax Credit
Many families are unaware of the Disability Tax Credit (DTC), a non-refundable tax credit to help people with disabilities or their supporting family members. You can only claim the disability amount if you and your family are entitled to the DTC. If you’re wondering if you’re eligible, speak to your family doctor or other medical practitioner. If he or she thinks you qualify, they’ll complete the necessary paperwork.

The biggest benefit of the DTC is that it opens the door to other programs, including the Ontario Disability Support Payment (ODSP), the Registered Disability Savings Plan (RDSP) and the Henson Trust.

The details on each of these programs are complex and beyond the scope of this post, but in a nutshell, here’s how they work:

  • The ODSP offers financial assistance, benefits and help with finding and keeping a job.
  • Similar to a Registered Retirement Savings Plan, the RDSP is a long-term savings vehicle for people with a severe disability. In addition to the money a family invests, the government also contributes to the fund.
  • A Henson Trust is a way to ensure financial security for someone who is not able to earn an income or manage his or her own money. In Ontario, the income from a Henson Trust is especially important for the disabled since it doesn’t disqualify them from the ODSP.

Don’t Go It Alone
Every family needs to plan for the future, especially those with special needs children. Yet financial planning in these families comes with many challenges. You are likely overwhelmed caring for your child on a daily basis, not to mention planning for their future care when you’re not there to provide for them. 

Take some of that weight off your shoulders by surrounding yourself with the right professionals who will help.



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