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Crafting a financial strategy for your special needs family

Kelly Kowalski, Cliff Noreen, and Bronwyn Shinnick

Posted on May 04, 2023

Our executives and experts team up to write educational articles, covering a variety of financial topics such as life planning, college savings, and retirement.
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Lay out five ways that creating a financial strategy can help your family.

Point out the importance of a Letter of Intent as a central point of your strategy.

Explain the importance of having a team of experts to help ensure your plan’s overall effectiveness.

For families with a special-needs loved one, the importance of having a financial plan in place cannot be overstated.

Estate planning tools, including wills, powers of attorney, and life insurance trusts, can potentially help provide for the care of a person with a disability (regardless of age) long after their caregiver is gone. They can also deliver peace of mind. (Related: An overall approach to special needs planning)

“A typical client may come into my office and ask me to show them how to get their kids through college and fund their own retirement, but it’s very different for families with a special needs child,” said Steve Thompson, a financial professional with Skylight Financial Group in Cleveland, Ohio. “Very often they have a lifetime care issue. What keeps those parents up at night is what happens to their child if mom and dad aren’t there.”

Creating a financial strategy can help your family:

  • Resolve current issues by addressing those things you struggle with each month (e.g., transportation, respite care or finding family time) and the ongoing concerns you just don’t seem to have time to tackle (naming a future guardian, creating a transition plan, etc.).
  • Prepare for future needs by taking action to address college expenses, funding your retirement and other long-term savings goals.
  • Establish a financial safety net to provide for your child or other family member with special needs as he or she grows old.
  • Create a legacy for you to pass on to other family members, friends, institutions, or charitable organizations.
  • Reduce stress — when you have peace of mind that your finances are in order, you can focus better on other issues at hand.

First Step: Letter of Intent

To help their families get organized and prepare for a time when they can no longer provide care — whether temporarily or permanently — Thompson said it is important to complete a Letter of Intent. This document records personal, medical, educational, and social information about your family member with special needs.

“A letter of intent lets mom and dad create a user’s guide of sorts in which they share everything relevant about their child, from what schools they go to now and whether they have an individual education plan, to what medications they have tried in the past and the degree to which they have worked,” he said. “It is totally comprehensive and should even include information on what their child’s morning routine looks like and what their favorite color is.”

Putting everything down on paper, said Thompson, can be a great source of great relief for parents as it helps ensure a smooth transition in the event they predecease their child.

Once you have documented a letter of intent, regular updating will help ensure that anyone providing care for your loved one will have the information they need to maintain quality of life.

You have help

Creating a financial plan that provides for your both your own needs and those of your child’s can feel overwhelming, making it all the more important to assemble a team of trusted advisors.

Key resources that can help in your decision-making process include financial professionals with special needs training, such as a Special Care Planner or one who has the ChSNC designation, attorneys with special needs experience, accountants, bankers, social workers and advocates, and medical providers.1 Each has an important role to play in the process.

As a first step, your financial professional can help you review your assets and liabilities, identify risks, and outline immediate and long-term goals. He or she can also help educate individuals about products and strategies that may help mitigate risk. (Related: 3 times you probably need financial guidance)

For his part, Thompson often recommends families with special needs kids purchase a survivorship whole life insurance policy with a death benefit sufficient to meet their child’s future financial needs. Such policies, which are generally cheaper than two separate whole life policies, cover two lives instead of one and only pay after the second policyholder (in this care the second parent) passes away. Often, such life insurance policies are placed in a Special Needs Trust.

“That way if mom or dad end up needing long term care, which eats up all their assets, they still have a life insurance benefit to leave to their child,” he said.

Gaining momentum

Once you've taken the first step and connected with a team to help with your plan, you might find that gaining momentum is easier than you imagined. Next steps may include making a family budget, juggling how money you save is distributed, or completing a health care proxy and living will.

You may also find that tasks you think are more time consuming, such as writing your will — or even impossible, such as funding a special needs trust — may be less complicated and indeed attainable when you have the information and resources available. The important thing to remember is that you set the pace. Life can be hectic, so you should approach each step in the planning process when you’re ready.

It’s your move

It is important to consider your family’s future when establishing a strategy. No one professional can provide everything a family needs. An integrated team comprised of an attorney, a CPA and others, such as social workers and caregivers, or a financial professional who specializes in working with special needs, all working together is the best way to establish a strategy that will help you feel secure. We recommend you work with professionals who are qualified, experienced, and involved in the area of special needs. The first step is yours to take. Contact us.

Learn more from MassMutual…

Special needs and family balance

Caring for a loved one with special needs entails SpecialCARE

Helping your teenager establish good credit

This article was first published in March 2017. It has been updated.


¹The Special Care Planner is a title used by MassMutual financial professionals who have received advanced training and information in estate and tax planning concepts, special needs trusts, government programs, and the emotional dynamics of working with people with disabilities and other special needs and their families. The certificate program was offered by The American College in Bryn Mawr, PA, exclusively for MassMutual financial professionals. Additionally, a designation of Chartered Special Needs Consultant ( ChSNC), which evolved from the certificate program, is now offered through the American College for financial professionals. MassMutual financial professionals who have completed the certificate program, or received the ChSNC designation can use the Special Care Planner title.

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The information provided is not written or intended as specific tax or legal advice. MassMutual and its subsidiaries, employees, and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of MassMutual.