transition planning 14+

[Guest guest]

By Randy Neumann

Raising kids with disabilities can be financially challenging, says

the writer, a financial planner and parent. Fortunately, there's

government help available.

More than 5 million American children between the ages of 3 and 21

suffer from serious disabilities -- from learning disorders to

debilitating diseases.

But talk to the parents of most of these kids and its not their

disabilities that they worry about so much, if they're not life

threatening. Kids have an amazing capacity to cope, and treatments are

constantly improving.

What often troubles parents even more is whether they can afford to

pay for the special needs of their kids, and how they can provide for

their kids needs when they themselves are no longer around.

Financial planning for a kid with disabilities is especially tricky,

not only because of the child's unusual needs -- he or she may never

be self-sufficient, for example -- but also because of Uncle Sam. The

tax code was not written with their needs in mind. And public programs

aimed at helping kids can sometimes backfire on them and their

parents.

The politically correct say special or exceptional. If you have a

child or grandchild who is physically or mentally limited (the P.C.

term is special, or exceptional), you'll have to heed a different set

of financial rules if you're going to provide the best you can for the

youngster.

Take a simple thing like funding the child's college education, for

example. For the ordinary child, the parents or grandparents might

want to put money aside in a trust. Laws such as the Uniform Gift to

Minors Act or the Uniform Transfer to Minors Act encourage such gifts.

The main advantage of these trusts is that the income produced belongs

to the child, and is taxed at the child's (usually lower) tax rate.

But the law stipulates that the income cannot be used for the child's

support. It also stipulates the assets in the trust must become the

child's at age 18 or 21, depending on the state.

But for the child with disabilities, income from the trust might be

needed for support. Whats more, the young man or woman might not be

able to manage his or her financial affairs at 18 or 21.

L. Brunetti, an attorney in Hackensack, N.J., warns of another

problem with trusts: If the child could qualify for government

programs, the assets in the trust might disqualify him from receiving

benefits.

Brunetti also notes that if the child has been receiving benefits from

government programs, the money in trusts could now be considered fair

game for the government. So, if you have a child who has a handicap

that could qualify him for government aid, do not fund trusts for

them, he advises.

There is plenty of help available:

Don't be shy about seeking government help. There is a lot available

for children like yours. Start with your local school system. Federal

laws mandate programs to meet the educational needs of kids with

disabilities. Its the school districts responsibility to identify

individuals with such needs. If you are new to the school district, or

have a child younger than school age, you should initiate a meeting.

This was the case with my youngest son, . At 3

years old, he had a vocabulary of six words, well below the norm. We

advised our school district of his problem, and school specialists set

up an Individual Education Plan, or IEP. A child study team creates an

IEP. The team usually consists of a learning disabilities teacher, a

psychologist, a nurse and one or both parents. If necessary, other

players are added.

The team performs a multi-disciplinary evaluation. The objective of

the IEP is to develop a program that meets the child's educational

needs. What if the system does'nt have a program that meets your

child's individual needs?

According to Campion, director of special programs in Ridgewood,

N.J., They cant say no because they don't have it. If thats the case,

they must create it. Failing that, the district will transfer the

child to a school system that does have it.

Social Security isn't just for seniors:

The big daddy of government benefits is the Social Security

Administrations Supplemental Security Income Program. For 2005, it

pays $579 per month (supplemented by some states) to someone who has a

qualifying disability.

What conditions qualify? The Social Security Web site has a " listing

of impairments " which includes common physical and mental conditions,

such as attention deficit hyperactivity disorder, cerebral palsy,

sickle cell anemia, spina bifida, mental retardation, autism, eating

disorders, anxiety disorders, schizophrenia and many other conditions

severe enough to disable a child or adolescent.

But the Social Security Administration recently tightened its rules.

Specifically, recipients with emotional or behavioral problems or

mental retardation may no longer be eligible. For more information,

try the Bazelon Center for Mental Health Law, a nonprofit legal

advocacy organization.

Life after school:

OK, you got your child through school and shes reached the age of

majority (18 or 21 years). What now? Well, things are a lot better

than they used to be. There was a time when these young adults were

hidden in a closet. Now many live on their own or in group homes, and

start careers. Some work in sheltered workshops.

After the age of majority, while we may consider them our children,

the law does not. Legally, they do not have to listen to our advice or

prodding or even anything we say.

Sometimes, however, these young adults cannot fend for themselves in

the financial world. They can become involved in transactions that

are'nt in their best interests, yet can be held legally accountable

because they are legally adults. In these cases a parent or other

family member or friend must petition the court to become a guardian

or legal protector.

Just because you are the parent doesn't mean you are automatically

named as guardian. You, like anyone else, must go through the legal

system. The process is time-consuming and expensive. You have to pay

court costs and attorneys fees for both the incompetent (the child)

and the guardian (you), as well as physicians fees for affidavits. It

often makes sense to name co-guardians so if one dies or cannot

continue for any reason, you have a backup without going through the

process all over again.

When you are no longer around:

The final area of planning to be considered is trust and estate

planning, which requires some artistry. Heres why.

In routine trust and estate planning, wills and trusts generally

specify what is to be paid to whom and when. Planning for people with

disabilities is very different because if you use standard wills and

trusts, the money can easily fall prey to the government and other

creditors.

Normally, a trust document will pay out money to the beneficiary(s)

for such needs as health, maintenance and support. If you do this with

a person with disabilities, the government can say, Hey, you use up

your trust money before I contribute anything.

The government can also say, Ive been paying benefits to this person

for many years. That person now has some money. I will take it as

repayment for past benefits, X amount of dollars now, and will require

the trustee to pay out Y in the future.

Special trusts for special kids:

There is a way around this problem. Its called a special needs trust

and many lawyers don't know about it. (If yours doesn't, get another

attorney).

The difference between a traditional trust and a special needs trust

is what the money pays for.

In the traditional trust, the trustee is instructed to pay for things

like health, maintenance and support. But if this language is in a

trust and the beneficiary is disabled and receiving other government

benefits, the government can compel the trustee to pay for health,

maintenance and support.

A special needs trust should not instruct the trustee to pay for

basics like health, maintenance and support. The trust can pay for

vacations, traveling companions, additional therapies or medical

procedures, an advocate, etc.

The special needs trust is the only estate planning document that

enables parents to provide the extras for the special needs child,

after they have gone.

You can get a lot of information about these trusts on the Web -- from

financial institutions, law firms and others. Try, for example, the

National Special Needs Network. There are also sites listing

publications and videotapes that deal with issues related to

disabilities and self -advocacy.

Finally, be sure to talk to your team. Someone is going to be the

guardian and someone is going to be the trustee for the child when

you're gone. Talk to them so they know what you want them to do. In

addition to your will, which is a stilted legal document, write

letters to those whom you care for, or need to instruct. Do it now;

tomorrow might be too late.

http://moneycentral.msn.com/content/collegeandfamily/raisekids/p37250.

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Lockaby-Cotter

Mom to Olivia,(4.5) 22q13 Deletion Syndrome & Ian,(12) typical

www.22q13.org Website designer/Webmaster

Norton, MA