What's different about financial planning for special needs?

So what makes financial planning for special needs different from financial planning in any other situation? 

Why should you use a specialist for your financial planning rather than just any financial planner?

While the financial planning process is the same, the best results can only be achieved if the planner has an intimate understanding of how Wills and Special Trusts need to be drafted to ensure that the unique aspects of the needs being addressed are properly catered for.

Usually, generic templates are used for Wills and Trusts and even the tailoring that takes place to accomodate the preferences of a particular client are done with certain assumptions in mind.

The special needs scenario requires a different set of asumptions and the willingness to create solutions that are genuinely unique where that is needed. An ill-informed advisor, who lacks an appropriate frame of reference, might start out with the best intentions and end up making serious mistakes without even realising it because he is unable to grasp the nuances of the situation.

What makes our process specialised, is that we have taken the time to understand the nature of the need and that during our initial consultation we seek out a clearer understanding of how that need is unique in your family so that we can design the best possible solution.

I have spent time with Momentum Fiduciary Services and we have developed a template that gives us a better starting point than the generic templates available and this helps us ensure that important issues are not missed and that most of our efforts can be focused on your unique requirements.

Some of the key issues that need addressing when planning for a situation where a child will be dependent for the long term include:

• Who will take care of your child while they are a minor and then when they reach adulthood?
• If guardian needs to change, how will that transition be managed and who will the new guardian be? What will determine the timing of such a change?
• Where will the child live at various life stages?
• What needs will have to be provided for? (E.g. medical aid, board and lodging, clothing, pocket money etc.)
• How will those needs be funded during your lifetime and after your death?
• How will that funding be managed to ensure that it is sustainable for the long term and who will be responsible for that? What processes are there to ensure financial management is sound?
• What about your own retirement planning and the needs of your neurotypical child?

The above list can be extended quite a lot further, but in short, the real challenges arise from addressing the need to provide sustainable long term funding to ensure that your desired life-long care plan can continue and from the need to ensure that your child is cared for with the love and empathy you would want for them and with the consistency that is required for a sense of security.

Your comments and questions are valued

Your last love-letter

Far too many people don’t realize just how important it is to have a Last Will and Testament and to keep it up to date.

Without it, their families could experience hardship and tough decisions which often result in conflict between their loved one’s in addition to the their grief.

As a parent, your Will allows you the opportunity to appoint a guardian of your choosing for your children so that they can be raised with the love and care you would want for them. Where there is no Will, the state must select a guardian for your children.

Another important function of a Will is to see that your assets are given to beneficiaries of your choice and in the appropriate proportions. If minor children (under 18 years) are involved, your Will determines who will take of your children’s inheritance until they can do so for themselves. If you don’t have a Will, then the State places the cash form the inheritance in the “guardian’s fund”. If you own properties or business assets and die without a Will, the assets will be sold for cash as the guardian’s fund can only accept cash. Sale of shares in a business or fixed property at auction or in poor market scan result in your children’s inheritance being substantially reduced.

In the event that one divorces, the Will should be updated within three months or the ex-spouse could inherit despite the divorce.

The process of drafting a Will asks questions which may well highlight critical financial planning issues that could have gone overlooked, so the process itself is of great value.

The Will is a key tool in the financial security of your family regardless of how wealthy you are. The orderly execution of your carefully thought out wishes could be regarded as your final act of kindness toward your family – Your Will is your last love-letter to them.