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At a recent webinar, members of the Academy of Special Needs Planners (ASNP) discussed the possible impact on people with spe...Read more
The new year is always a time to take stock of the previous year and to make positive changes for the months ahead. Here are several resolutions that families of people with special needs will want to keep, in 2014 and beyond.
1. Review and Update Retirement Plan and Life Insurance Beneficiary Designations
Many retirement accounts, like 401(k)s and IRAs, allow you to choose who will receive the account when you are gone, and life insurance policies obviously have named beneficiaries that you can name in advance. In many cases, retirement assets and life insurance will make up the majority of the inheritance that you leave for your family. It would be a shame if these important assets were squandered because you failed to name the proper beneficiaries.
The biggest problem with these beneficiary designations is that they are not always very specific. For instance, a beneficiary designation may say that the primary beneficiary is the account holder's "spouse" and the contingent beneficiary is the account holder's "children." If one of those children has special needs, then according to the beneficiary designation that child is entitled to receive his share of the account or insurance policy outright. If the child receives government benefits, or if he is simply not very good with money, then the receipt of a large inheritance could be disastrous.
This new year, make a resolution to review your retirement plan and insurance policy beneficiary designations. If you have not already done so, there are many ways to use the funds for the benefit of someone with special needs without having to give them the money directly. For example, your life insurance policy could fund a special needs trust for your child, or your retirement account could be left to another child in order to "even out" a larger distribution of cash to your child with a special needs trust.
2. Learn More About Your Family Member's Government Benefits
Government benefit programs for people with special needs can be one confusing jumble of acronyms. Most families are lucky to know the difference between SSI and SSDI, let alone how those programs work in detail. Yet in many cases, family members are the people responsible for managing money for a loved one, and the decisions that they make when it comes to spending that money can have life-altering ramifications for the person with special needs.
Since most people will review their finances at the beginning of the new year, this is the perfect time to resolve to really understand some of those tricky government benefits that your loved one may receive. Take the time to talk with your special needs planner, join a support group with other relatives of people with special needs, and read a book from a reliable source about government benefits. The information that you gain in the new year could improve the life of your family member for years to come.
3. Create That Special Needs Trust (or Trusts)
Special needs trusts serve a variety of purposes, and depending on your family member's individual set of circumstances, it may be wise to create at least one trust to protect their assets and to ensure that they will have funds available when they need them in the future. In some cases, you may be the only person who can easily create the proper type of special needs trust for your family member, and the failure to do so when you have the chance could lead to a much more costly court procedure down the road.
While the upfront cost of setting up a special needs trust may seem prohibitive now, the future benefits far outweigh the small cost. If you have been thinking about creating a special needs trust for a family member, take the time to do so at the beginning of this new year -- the trust will last a lifetime and could very well be the most important investment that you ever make.
4. Take Some Time for Yourself
Helping to raise a family member with special needs can be more than a full-time job. While it is usually very rewarding, there can be times when you need to step back and take some time for yourself. However, many family members of people with special needs are so wrapped up in helping their relative that they forget to take care of themselves. While this obviously isn't healthy for the caregiver, it also affects the person with special needs in the long run.
If you haven't taken a break in a while, make it your New Year's resolution to take a little more time for yourself. There are many organizations that offer respite care for family members of people with special needs. This can give you the day or weekend off that you need to recharge. If you have other friends or family members who have offered to help out, take them up on their offer and get away for an afternoon. If you have always wanted to take a vacation and you can afford to hire help, do it. You'll feel better in the long run, and your loved one will benefit from your newfound energy.