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Are You Caring for a Special Needs Child?

Are you a parent caring for a child with a developmental disability, such as autism or ADHD? Not only are the daily demands daunting, but you are probably worrying about future care for your child. I was astonished (but in some ways not really surprised) when I read survey results by The Hartford Financial Services Group which reported that 62% of parents with disabled children said they hadn't established a plan for what would happen when they (the parents) were no longer around or able to care for the children.

Also, disturbing was the finding that about half of the surveyed parents said they planned to leave assets directly to the child, and 58% expected to designate the child as a beneficiary. What these parents didn't realize was that the seemingly generous act could possibly make the child ineligible to receive public assistance, which could be crucial for their child's long-term welfare.

I suggest to parents caring for a special needs child that a better approach may be to create an irrevocable "special needs trust" that can be funded now or through their will. (The money often comes from life insurance death benefits.) Structured correctly, it will enable a special needs child to receive public assistance benefits while the trust covers other expenses—including travel, recreation, and rehabilitation—that aren't fully paid for by government funds.

But use caution because if the trust assets are used as a primary means of support, the disabled child may be disqualified from public assistance, the same as would happen if a child received a direct inheritance or gift, as I mentioned above.. If you don't want any problems, a special needs trust should have an independent trustee who controls distribution of trust assets, but uses the money only to supplement government aid. A provision in the trust should prevent the trustee from using assets for "support, maintenance, welfare, and education" of the child.

There are some exceptions to this kind of trust, especially when including it as part of your overall estate plan. I am referring to gift tax exclusions and costly asset transfers to your other children during your lifetime. Also, laws governing trust language and operation may vary from state to state. To illustrate, sometimes the assets that remain in the trust after the disabled child's death must be used to pay back the government for public assistance benefits. I can explain these exceptions in detail, and work either with your attorney or ours to help you establish a special needs trust for your child— while protecting everyone's interests. 

You can call me at 732-974-3770, email me at or visit us at  

See you next time!


Securities offered through American Portfolios Financial Services, Inc. Member: FINRA, SIPC. Investment Advisory services are offered through American Portfolios Advisors, Inc., an SEC Registered Investment Advisor. Froehlich Financial Group, LTD is not an affiliate of APA or APFS.   



Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.

Securities offered through American Portfolios Financial Services, Inc. Member: FINRASIPC. Investment Advisory products/services are offered through American Portfolios Advisors, Inc., a SEC Registered Investment Advisor. Froehlich Financial Group, Ltd. and American Executive Benefits, Inc. are not affiliates of APA or APFS. Executive wealth management products/services are offered through Froehlich Financial Group, LTD. a registered investment advisor

This communication is strictly intended for individuals residing in the state(s) of CA, CO, CT, DE, FL, IL, MA, MD, MI, NC, NJ, NY, OK, PA, RI, SC, TX and VA. No offers may be made or accepted from any resident outside the specific states referenced.

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