Background:
John and Sarah, a middle-aged couple, approached our firm with significant concerns about their financial future. Both their children, aged 8 and 10, have special needs. John and Sarah are deeply worried about their children's long-term financial security, especially if something happens to them.
Challenges:
The situation for John and Sarah was complicated and required setting up priorities for the order in which items should be addressed. Most important, they wanted to ensure that their children received the care they need throughout their lives. Additionally, they needed to update their estate planning documents and ensure that these coordinate with government benefits so that the children are not disqualified from receiving any aid. Lastly, we needed to address the long-term goals of John and Sarah.
Our Approach:
- Discovery Meeting: Our team began with an in-depth discovery meeting to understand the family's current financial situation, goals, and the specific needs of their children.
- Special Needs Trust: We recommended setting up a Special Needs Trust (SNT). This would ensure that any inheritance left for the children would not count as personal assets, thereby not risking disqualification from government benefits.
- Life Insurance: We then recommended life insurance policies for John and Sarah. The benefits would flow into the Special Needs Trust, ensuring the children have financial resources for care without impacting their eligibility for assistance.
- Financial and Budget Planning: A personalized financial plan was created to accommodate ongoing medical and therapy expenses. We also recommended an investment strategy to grow their assets over time, accounting for the children’s future needs.
- Estate Planning: We connected the couple with an estate attorney to update their will, ensuring the SNT was properly mentioned and that guardians were named for their children.
- Retirement Planning: We laid out a long-term path for John and Sarah for their retirement goals.
Results:
John and Sarah now have a comprehensive financial plan in place that considers their children's unique needs. Their assets are structured such that they do not risk losing essential government aid for their children. They have peace of mind, knowing they have set up a system that will provide for their children even if they are no longer around.
Conclusion:
Our Team demonstrated the importance of specialized financial planning for families with unique challenges. By understanding the complexities of planning for special needs children and integrating diverse financial instruments like Special Needs Trusts, they provided John and Sarah with not just a financial plan, but also peace of mind.