Planning for your children's future after you're gone is a necessary and sometimes difficult task. For parents of disabled children, there is an even more important need to make sure that their plans will properly provide for their children. Careful planning can ensure that a special needs child has all the basic necessities - and more.

It is easy to put off the planning that should be done to care for a disabled or special needs child. Unfortunately, not planning is the worst thing a parent can do for their child. Regardless of whether you leave a will or whether your estate must go through probate, not planning can cause whatever inheritance you intended to leave for your child to disappear due to estate taxes.

If your child cannot live alone, he or she may need to be cared for by a state institution. The problems with leaving your inheritance directly to your child are evident when you consider that most states can enforce liability for the cost of state funded institutional services against the disabled person's assets.

To avoid this problem, some parents leave money to a sibling specifically for the care of the disabled child. This plan, however, has some significant difficulties. The sibling may initially be willing to help, but after they have had to sacrifice their own family's needs for those of their disabled sibling, they may abandon some of the responsibilities. If the sibling goes through divorce or bankruptcy, or if the funds intended to provide for the disabled sibling are simply not enough, the sibling may incur their own financial struggle in attempt to provide for their brother or sister.

A discretionary trust fund or a living trust may be a solution for many parents facing planning for the future well being of their special needs child. If a skilled attorney properly establishes the trust, the trust will not disqualify the child from receipt of Medicare or Supplemental Security. As with all trusts, the trustee has the power to use the trust's income and principal as needed, but only for supplementing the assistance provided by public programs. In this way, the child receives the basic care provided by the social program, in addition to the extra items needed that will improve their quality of life. For example, the trust's funds can provide for travel expenses, extra clothing, and special medical care that the disabled child would not otherwise receive. Plus, the assets in the trust can accumulate, maximizing the funds available in the trust for future distribution to the disabled child or other heirs.

Some families may be lucky enough to just rearrange their assets in order to fund the trust. Others, however, may decide to fund the trust with a permanent life insurance policy. A second-to-die policy, with a slightly lower premium than a traditional permanent life insurance policy, may fit the needs for those wanting to provide for a special needs child. Because the policy is not payable until the second spouse dies, the funds to care for the child will be there precisely when they are needed. Whatever you choose, make sure you plan well in advance for the future of a special needs child. You will have peace of mind knowing that your child will be cared for as well as if you were there, providing care yourself.

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