Raising a child is a team effort of both parents with additional help from family members when possible. Working parents juggle between family life and career demands balancing both as best as possible. When a family includes a child with disability, parents experience stress and challenges that impact their relationship and marriage, many times resulting in a divorce.
Divorces in general are unpleasant with emotional and financial consequences effecting the entire family. When a child with disability is involved in a divorce, the well- being and future planning of the child requires special considerations that may be different from the family’s other children. Depending upon the age of the child at the time of the divorce, these considerations may be divided between parenting, transition to adulthood, estate/legal and financial planning. The caregiving and medical requirements of the child, special nutrition, education needs, respite for the custodial parents etc. are some of the things that should be addressed before deciding on custody, visiting rights, sharing of cost of support and property divisions.
Generally, child support and custody end at the age of majority or upon completion of education. Some children have severe disabilities and require on-going care and supervision. In addition, future needs of a child with disability is often difficult to predict. The divorcing parents in these situations may have to agree on co-parenting for many years. There should be room for reassessing the financial and caregiving needs periodically to determine changes in the terms originally agreed on.
It is recommended for a divorcing couple to work with a team of a family law attorney, a special needs attorney and a financial planner experienced in divorce and special needs planning. Financial planning may need to address the custodial parent’s financial security depending upon his/her ability to work while caring for the child. Life insurance and other risk management tools may need to be considered for both parents to protect the surviving parent in the event of an untimely death or disability.
Protecting the child’s government benefits will be an important criterion. Programs like SSI and Medicaid are ‘means tested’ and can be jeopardized by child support paid directly to a custodial parent. Other planning strategies may need to be considered for financial support while still maintaining the child’s legibility for the public benefits.
Estate planning documents including a special needs trust will need to be created by both parents. Each parent may choose to create their own special needs trust (Third Party Trust) or may have a common trust. If they have separate trusts, the trusts can have language that will allow the trusts to merge if the terms of both the trusts and trustees appointed are identical. When parents have an agreement of continuation of child support, a First Party special needs(d4(A)) trust or an ABLE account may be established for that purpose and still protect the eligibility for public benefits. Grandparents from both sides are also recommended to coordinate their estate plan with their grandchild’s special needs trust. Funding strategies for the special needs trust may be addressed by both parents through life insurance or other assets.
Changes may occur in special needs planning laws, parent’s finances and health and the needs of the child. Periodic reviews will be necessary and is in the best interest of the parents and the child with special needs.
Minoti Rajput CFP ChSNC
Minoti Rajput is the founder and principal wealth advisor of Secure Planning Strategies. She has been working with families with children of special needs for over thirty years and is a frequent speaker on various topics related to special needs planning. She is also the author of ‘Beyond a Parent’s Love. https://www.spsfinancial.com/minotis-book