Among the costs of caring for a dependent with special needs are the fees for professional advice. Some families are tempted to save on these costs by setting up a plan on their own. This can be attractive because so much information is available online, free of charge. Because low-cost platforms and templates abound, it is easy to get the idea that special needs planning is straightforward and one-size-fits-all, and at little cost compared to a professional planner’s fees. Some parents or guardians might believe that they understand their situation best and don’t want to put their family into the hands of a complete stranger who will charge by the hour.
This is not “man-off-the-street” stuff. Don’t do it yourself!
There are so many potential downsides to DIY planning that families do this at their peril. An inadequate plan could fail to protect your child’s interests in the near term or set up proper care in the event of your death or disability. Moreover, poor planning could cost your family thousands of dollars in the future and end your child’s eligibility for crucial public benefits like Supplemental Security Income (SSI) and Medicaid.
Which is worse ‒ paying upfront for customized, professional advice, or inviting one (or all) of these bad outcomes on yourself due to faulty planning? One of the key benefits of special needs planning is peace of mind, something that can’t be guaranteed if you take on this complicated process yourself. After all, you don’t know what you don’t know.
Avoid the one-size-fits-all approach
Websites and online templates work from a standardized list of assumptions. These can’t possibly know the specific circumstances of your family (you are divorced, for example, and your ex-spouse has remarried and has other dependents; a family member wants to name your special needs child in her will; you have received a job offer in another state and are thinking of moving your whole family).
There are many variables in special needs planning. Can an online platform choose the right kind of special needs trust for you? How well do you understand the different types (e.g., first-party vs. third-party; revocable vs. irrevocable) and what is the best instrument for your family and circumstances? What are the pros and cons of saving money in an ABLE account? Only a professional can help you sort through questions like these.
No one to help if things get complicated
Your situation could change with an unexpected death, inheritance, or change of living circumstances. Without professional guidance, you might expose your child to inadequate care or funding, or jeopardize his/her eligibility for public benefits like SSI and Medicaid. Will your do-it-yourself plan guide you when or if your dependent with disabilities is eligible for part-time work or living in a group home? And you will need an attorney if you have to go to court (for example, over questions of guardianship when the child with special needs reaches the age of majority, if there is a custody dispute in a divorce case, or if you are appealing a rejection of SSI benefits).
Dire financial consequences
A trust or plan that is not customized to your individual family, financial status, or state of residence could jeopardize your child’s eligibility for public benefits, and you wouldn’t even know it. The laws are complex and vary from state to state. How reliable and trustworthy is the information you might find online? Would you risk your child’s eligibility just to save some money upfront?
If your dependent with special needs has received Medicaid funds from your state, and you have also set aside money for that person’s care, it’s important to understand the “pay-back” laws in your state and how they pertain to your plan. A pay-back provision means that the state can claim reimbursement for Medicaid costs on the death of the beneficiary if funds remain in the beneficiary’s name. But some types of trusts, such as third-party or donor trusts, are protected from such requirements. Wouldn’t you rather have leftover funds go to another family member if the law allows that in your state?
Missed opportunities and hidden risks
Because there is no one set of laws pertaining to special needs families that covers every state, there’s no way a do-it-yourself template you might find online will help you understand the benefits programs available in your state, let alone their eligibility requirements. A licensed local professional will have this information readily available to help you put together your plan.
Or your state may have greater restrictions for benefits than are indicated in any online platform that offers only general guidance. You could create a plan using do-it-yourself tools and not discover until it’s too late that your loved one with special needs is denied benefits because of how you set up your finances.
The complexity of special needs planning makes it risky to do it yourself. This complexity also means that it is inadvisable to use the services of an attorney or financial planner who doesn’t devote a significant part of his or her practice to this type of work. Even many general estate planning attorneys may not understand the nuances of the law in planning for persons with disabilities. The key is to select someone with experience helping individuals with special needs and their families plan for the future.
There’s nothing wrong with educating yourself about special needs planning using available reference materials. But when it’s time to create and execute a plan designed for your loved one, be sure to work with a special needs planner from the start.
If you would like help with planning for a family member with special needs, we may be able to help. That’s just part of what we do.