Can you tell me more about the special needs trust and disability savings? My son is disabled as well.
Absolutely!
My info is specific to Canada (or even British Columbia, Canada), not sure how it will translate to your region, but...
Canada recently created a
Registered Disability Savings Plan, which is a little bit like a Registered Retirement Savings Plan (similar to the US's 401(k)), but for people who have disabilities. I contribute to one for my son, and the government of Canada (thank you!) makes even bigger contributions. My son can't touch the RDSP for 10 years after the last gov't contribution, but then has it in his adulthood for anything he might need, including rent, etc. An additional blessing of this is that, at least in BC and under current laws, amounts drawn from this account will not reduce any monthly disability benefit he might be in receipt of, as it otherwise would.
I don't know if there are equivalents to this in other countries, but what is for sure "transferable information" is the critical step of
talking to disability agencies and finding out what is available in one's region, then accessing that. And, of course, addressing that in the will or associated documents. For example, I included a memo to his guardian to continue optimizing contributions to the RDSP, as it is so extremely valuable. If I fail to note that, how will the person taking over his care realize the option and value of this provision that I painstakingly set up for my son? So, end-of-life preparations would ideally include this type of asset, if applicable, as well as notes to those taking over care about continuing to optimize it.
The disability trust I imagine is available almost everywhere. It's simply a legal provision to hold/guard/monitor/disburse funds for someone else. In the case of both my son and I, I can put money into a very specific type and wording of Trust and, while our income is crap, receive support while retaining the asset. The catch is that a third party dictates where I or we can spend the money. But if a person's disability might result in lost/wasted money -such as with a severe impairment of executive functioning, impulsivity, etc- this is not a catch but a help. Like with the RDSP, under British Columbia's current laws, amounts drawn from the Trust
for very specific uses will not reduce any monthly disability benefit he might be in receipt of. (See why I needed a fancier lawyer?)
It's critically important to have additional preparations for kids with special needs, as it can be harder after their parents' deaths to locate an excellent new home for them, and also for the new guardians to suddenly be able to pay out for all the disability-related costs. I would say lots of extra life insurance (term) as well as the other items mentioned. I made sure my son's guardian would have enough to quit her job if my son needs to return to homeschooling, and also to hire tutors, hire lots of respite time, etc, over and above the costs of his food, room, etc. I literally closed my eyes and imagined their life together, priced what I anticipated their needs to be, and got insurance in that amount.
Did any of that help at all?