What is an ABLE account?

ABLE means Achieving a Better Life Experience. The U.S. Congress passed a law in 2014 that created them. ABLE accounts are tax-advantaged investment accounts. They allow someone with a disability or an authorized individual (parent, guardian or appointed individual through a power of attorney) to pay for living expenses that are outside of the government assistance they receive. It helps those who are disabled have a higher quality of life because if they are receiving government benefits, then they are limited to having only $2,000 in financial assets.

Who qualifies for the account?

ABLE accounts have some specific qualifications. They include:

• Onset of their disability or blindness before age 26.
• Receives Social Security Income (SSI) or Social Security Disability Insurance (SSDI).
• If does not receive SSI or SSDI, has a doctor’s diagnosis of significant functional impairment.

What if your child doesn’t receive SSI now? Does that mean you cannot set up an ABLE account when they are an adult? If they qualify for SSDI as an adult, then you would be able to set up an account for them then. You would not be able to establish an account for your child before then though.

How are ABLE accounts managed and used?

An ABLE account is established through your state’s program. However, if you like another state’s ABLE plan investment options, some states allow out-of-state residents to open an account through their program.

You can choose from a variety of different saving and investment options for the ABLE account. These can be conservative to aggressive depending on how your child wants to use their account. There is a limit of $15,000 for annual contributions. However, if the person is receiving SSI, they have a limit of $100,000 total. Anyone can contribute to the account. In fact, if your adult child works a part-time job, their earnings can be put into the ABLE account (up to the annual limit).

Money in ABLE accounts can be used for a wide variety of qualified expenses. Those can be connected to medical expenses for the disability not covered by Medicaid. It also can be an expense that improves health, wellness or quality of life. The expense isn’t required to be a medical necessity. ABLE beneficiaries can use their money in a lot of ways. They can pay for education, save for a down payment on a home, purchase medical equipment and more.

Can you roll a 529 for education into an ABLE account?

In 2018, Congress passed the ABLE Financial Planning Act. This allows up to $15,000 to be rolled over from a 529 college saving account to an ABLE account without penalties. However, tax and legal experts advise against this in most cases. That is because 529 college savings accounts have a waiver of the 10 percent penalty if the beneficiary is disabled, and the money is still used for that person.

This is complex, so you should probably talk to a tax or special needs legal expert to understand more about 529 college savings plan and how you can still use that money for your child. Here is an article from the Special Needs Alliance that explains some of this complexity.

How to set up an ABLE account

If your child qualifies for an ABLE account, you can check out your state’s and other state’s programs to choose the best one for your child. Many states offer state income tax deductions if you choose the program for the state where you live. You will open the account online, and here is a resource to help you with enrollment in a program, including a state-by-state comparison tool.

Still have a lot of questions about ABLE accounts? The ABLE National Resource Center has an extensive list of frequently asked questions and answers that can help.

For more personalized help, talk to your tax expert or special needs attorney about if an ABLE account would be a good financial tool for your child as an adult.

Have you established an ABLE account for your autistic young adult? What was the experience like, and do you have tips for other parents? Leave a comment so that we can share and encourage each other along this journey?

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Determine level of need based on your child’s capabilities

The first thing you need to determine is what type and how much help your child will need in the future. Autistic people have a wide range of abilities. Those with milder autism (or what may have originally been diagnosed as Asperger’s Syndrome) may be able to function independently as adults. For others with moderate to severe conditions, they may need extensive help throughout the rest of their lives.

Finding a good estate lawyer and financial advisor

An estate lawyer and a financial advisor will be two good individuals to consult during this journey.

An estate lawyer can advise you about special needs trusts, wills, power of attorney and more. The lawyer also should be an expert in special needs law, so they can guide you through the intricacies of requirements related to government benefits, American Disabilities Act and more.

To find a lawyer, you can ask for recommendations from your local advocacy organization or other parents of special needs children that you know. The Special Needs Alliance also has a “find an attorney” by state of lawyers who specialize in special needs law.

You also may want a financial advisor who can help you with a financial plan and ensure you have the right investments that will help you reach your financial goals. One of those goals will be to plan and secure your autistic child’s future. But how can you find a financial advisor you can trust? This article from Experian provides some good information. It suggests you take a five-step approach:

• Know your financial goals
• For the financial advisors you are considering, find out their credentials. Are they a certified financial planner, chartered financial analyst, chartered financial consultant or another qualified advisor? What is really important is that they are a fiduciary. That means they legally must put your financial interests above their own.
• Ask your family, friends or work colleagues for recommendations (at least three) and check out the advisor’s online reviews.
• Send an email to them with questions before doing an in-person interview. Ask if they are a fiduciary, how they are paid, their credentials, investment philosophy, investment products they generally recommend and what minimum investments they require.
• Look for any red flags when you meet with a financial advisor in person. Those can include the advisor not listening to you, pressuring you, or making you feel uncomfortable. Instead, you want an advisor who really listens to you and will take the time to help you develop a plan that will assist you in reaching your financial goals.

Planning to secure your autistic child’s future

So what should you do to create a plan for your autistic child’s future? Here are eight steps to follow to develop your plan.

 1. Put your estate in order

Do you have a will, power of attorney, health care proxy and other necessary documents that will provide direction upon incapacitation and death? Do you have adequate life insurance with beneficiaries named? These are foundational documents of an estate, and especially important to have for your autistic child.

You also want to educate family members about leaving gifts or inheritance for your autistic child, especially if you anticipate they may need to rely on government benefits for living expenses when they are adults. To be eligible for many of these benefits, your child will be limited in how much money they may have (see below). If you have a well-intentioned grandparent or other family member who would like to leave money to your child as an inheritance, have them work with their attorney to ensure it is gifted in the right way. For instance, money could be left to your child’s special needs trust instead of to them personally.

2. Determine if you need to establish guardianship or supported decision-making

When your child is under age 18, you need to name a guardian who will take care of them in case you die. If your child is over the age of 18, it’s important to determine whether your child has the ability to make their own financial, medical and other major life decisions. Otherwise, you may need to establish a legal guardianship of your child. If your child is more capable but still needs help making important decisions, then supported decision-making may be a good option.

With supported decision-making, your child selects a group of trusted advisors, which can be family, friends or professionals, to help them make major decisions. This is less restrictive than a guardianship and gives your child more control over their affairs. Yet, they still receive help to do so. Each state in the United States has their own rules for this arrangement. Want more information? Check out the National Resource Center for Supported Decision-Making.

Another option that still provides your child with more control but allows you to help them is for them to give you power of attorney and a health care proxy. This will enable you to assist them with financial and medical services but doesn’t take away their ability to make decisions and control their own affairs.

3. Consider a special needs trust and/or ABLE account

A special needs trust fund allows you to set up a trust with life insurance proceeds or other money that will help provide for your child when you no longer can care for them.

There are three types of special needs trust funds:

First Party or Self Special Needs Trust Fund

This type of fund is created by assets owned by the person who has autism, and they are the beneficiary. These could be from an inheritance or another event such as a personal injury settlement. The fund must be created when the person is under 65 years of age and is considered irrevocable or cannot be changed. When the person dies, payment to Medicaid is required before distribution to anyone else.

Third Party Special Needs Trust Fund

This fund is created by assets owned by someone else other than the person with a disability, such as a parent, grandparent or other person. This can be established either during the creator’s lifetime or as a part of their will. It is managed by someone other than your child, and it’s not considered their asset. That means they remain eligible for government assistance that requires them to have limited assets. This type of fund does not have to pay Medicaid upon the beneficiary’s death. Instead, the remaining funds can be distributed to whomever the creator designates.

Pooled Special Needs Trust Fund

This type of fund is usually run by a nonprofit organization that acts as the trustee. For this fund, the organization “pools” assets from many different people into a master trust, and then it manages sub-trusts for the various beneficiaries. This type of trust can be helpful for those who do not have many assets to set up a trust individually for their child. This type of trust has a similar requirement as the self-special needs trust because it requires Medicaid be paid first upon the beneficiary’s death.

You will definitely need the assistance of a lawyer to establish a trust fund. For more information about special needs trust fund, check out this blog post.

Another option to provide funds for your child is the Achieving a Better Life Experience (ABLE) account, or the so-called 529 for people with disabilities. ABLE accounts can be established for individuals who are diagnosed with a disability before age 26 and who meet the eligibility requirements to receive Medicaid, Supplemental Security Income (SSI) payments and other government benefits.

Individuals who are eligible for government assistance can only have about $2,000 in assets. Funds in an ABLE account do not count toward those assets. They can be used for broader living expenses than what is covered by government benefits. Up to $15,000 per year can be put into an ABLE account. That can include money transferred from a trust fund.

A disabled person can benefit using an ABLE account because they can use a debit-like card to draw funds from the account. This gives them more autonomy over their own finances.

 4. Develop a Letter of Intent

A letter of intent provides valuable information and guidance to family and future caregivers for your child. It gives information about your child’s preferences, daily routine, wishes and more. This is not a legal document (although the name makes it sounds like it is). Parents should draft the letter and keep it with their estate materials. It’s important to revisit the letter every couple of years and update it. This is key step for your autistic child’s future.

5. Understand the rules of government assistance

The U.S. government provides a variety of assistance. This is through Medicaid, SSI, Social Security Disability Insurance Benefits (SSDI), Supplemental Nutrition Assistance Program (SNAP) to help those disabled with food and living expenses. These have strict financial and other requirements. Ensure that you understand the rules for each of them, especially the limit of financial assets a person can have to quality for assistance. Usually, a person can have no more than $2,000 in their own name. If your child has too many assets, they cannot quality for assistance when they are an adult.

6. Plan for housing

It is so important that you plan where your child will live when you are no longer able to take care of them. You have several options to consider if you do not believe your child will be able to live independently:

If you own your home outright, you can leave it to your child’s special needs trust fund. This will allow your child may continue to live there. Keep in mind that the trust also will need enough funds to cover the upkeep and maintenance of the home. You also will need to be sure you’ve appointed a caregiver to help your child (if necessary).

You also could purchase another home such as a condominium or house in your child’s name. Owning a house will not affect eligibility for government assistance.

Some disabled adults lived together in group homes with a counselor or other person who helps them manage their daily activities.

Sometimes, families of adults with disabilities work together to create a co-op (or cooperative) agreement living arrangement for their loved ones.

The U.S. Department of Housing and Development offers help in paying rent for disabled people. This is known as the housing choice vouchers, or Section 8. The waiting period for receiving a voucher is usually long.

For those with severe disabilities, institutions are an option. This article from The Children’s Hospital of Philadelphia has some good information about this type of living arrangement.

Assisted living facilities also are a housing option for those who need care throughout the day and night.

 7. Consider what post-secondary education your child is capable of completing

Ideally, you want your child to be able to make their own income to the best of their capabilities and be able to find meaningful work. This brings them greater quality of life. Therefore, consider what type of post-secondary education your child may be able to achieve. Could they go to a trade school or even college? If so, be sure you are planning on how to cover those expenses.

8. Help them obtain a job or even create one for your young adult

As your child grows older, you can help them obtain a job in high school or right after high school. This will make sure they are getting some work experience. Your local Vocational Rehabilitation can help with job coaching and planning for post-high school education. Some parents even create businesses that will employ their adult with autism.

Additional Resources

If you want to dive in more deeply to preparing for your child’s future, check out these resources.

What will happen to my Special Needs Child when I am gone: A Detailed Guide to Secure Your Child’s Emotional and Financial Future (affiliate link)

The Loving Push, 2nd Edition: A Guide to Successfully Prepare Spectrum Kids for Adulthood (affiliate link)

Taking the time today to focus on making a plan and securing your autistic child’s future is one of the most important things you can do. Putting these eight steps into action will help you know that your child will be well cared for when you are no longer able to provide that care yourself. Have you taken additional steps to prepare for your autistic child’s future? If so, leave a comment so that we can share and encourage each other on this journey.

The post 8 ways to prepare for your autistic child’s future appeared first on Autism & ADHD Connection.

What is supported decision making?

The Center for Public Representation states that supported decision making “allows individuals with disabilities to make choices about their own lives with support from a team of people they choose. Individuals with disabilities choose people they know and trust to be part of a support network to help with decision-making. Supported decision-making is an alternative to guardianship. instead of having a guardian make a decision for the person with the disability, supported decision-making allows the person with the disability to make his or her own decisions.”

How is it different than guardianship? Legal guardianship enables the guardian to make all life decisions for the person under guardianship. They control their money, where they live, where the work, medical decisions, etc.

Supported decision-making provides tools and process for the adult with autism to receive the advice and guidance they need from advisors of their choosing. It can be formal or informal.

How can supported decision-making help your young adult with autism?

A person is an adult at age 18 in the United States. That means they are held accountable for their decisions as any other adult, including financial and medical choices. Those are big responsibilities. That can be really scary for many people but especially for those who have developmental, intellectual and other disabilities. Supported decision-making can help them feel less apprehensive and provide the needed support to make confident choices with advice provided.

It also can give those of us who are parents and caregivers some relief to know that our young adults with autism will seek our advice before making big life decisions.

Reasons why you should consider supported decision-making over guardianship

Supported decision-making allows the ultimate decisions to be made by the person, who seeks advice and guidance from a group of trusted advisors who they choose. They are in control of their own lives, which is what every capable adults prefers – including those with disabilities. Yet, it gives them the help they need when they want and need it.

As our son J has gotten older, I have been thinking more about what type of support he needs for his future due to his autism and ADHD. He will definitely be able to make his own decisions, and I’ve seen a big leap in maturity over the past couple of years. I anticipate that will continue over the next several years. Yet, I do think he will need extra support, especially when he turns 18 and into his early to mid-20s. For him, I think supported decision-making will make a lot of sense. It will help to provide him with advice and recommended direction but allow him to make the final decisions about his own life. It’s something that I think is important for his mental health and sense of self.

Decision-making is a big part of self-determination. What is self-determination? It’s a person’s ability to make decisions and manage their own life. This ability affects a person’s well-being and mental health, and it affects their motivation. The motivation they need to grow in their life and other skills and seek greater knowledge. That affects the quality of their life.

How to put supported decision-making in place for your young adult with autism

So how does supported decision-making differ than being a sounding board for any adult child about big decisions they must make in their lives? A big difference is that supported decision-making can include some specific tools and process that can be used.

Supported decision-making can consist of:

• Supported decision-making agreement – Many states offer templates for these agreements. To view a model form, see this resource from the National Resource Center for Supported Decision-Making.
• Health Care Proxy – This gives a parent or caregiver the ability to help facilitate health care for their young adult with autism.
• Advanced Directive – This gives a person the ability to state formally their decision regarding life support and end-of-life care.
• Power of Attorney (or durable power of attorney) – This gives another person the right to make legal decisions on behalf of the individual under certain circumstances.

You can work with your young adult to determine how they will seek advice for decisions. Will they hold a meeting with advisors on a regular basis and document their decisions? Will it be an informal call to certain advisors about specific topics? How often will this occur?

To establish these documents, you should seek the help of an attorney in your area. If you’d like to find a lawyer who specializes in special needs law, you can search on the Special Needs Alliance website.

Have you put supported decision-making in place for your young adult with autism? If so, what has been your experience? What advice would you give other parents and caregivers? Leave a comment so that we can share and encourage one another on this journey!

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Families with autism have a greater financial burden than those that have neurotypical children. Consider these facts:

• A study published in Pediatrics in 2014 estimated families spend $17,000 more on autism medical and other expenses than families that do not have a child with autism.
• Research also found that lifetime costs of caring for a child with autism is about $1.4 million. Insurance and government assistance cover part of it, but families are burdened with high out-of-pocket costs when they also have lower income levels.
• A study published in 2012 (it evaluated data from 2002 to 2007) in Pediatrics showed that:
  • Families with a child with autism had a 27 percent reduction of family income. These families earned almost $18,000 less than families that did not have a child with autism.
  • About 62 percent of mothers who had children with autism were employed outside the home, compared to 71 percent of mothers who had children without autism.
  • Mothers who had children with autism earned 39 percent less than mothers of children without autism.
• Studies show that married couples who have a child on the autism spectrum are almost 10 percent more likely to divorce than those who do not have a child with autism.

Financial planning is important for everyone, but it may be even more important for families with an autistic child to ensure you take control of your money and make the most out of every dollar. That is why it’s important to take these 10 considerations into account as you evaluate your finances.

1. Discuss the anticipated level of independence that your child will have in adulthood

So much of financial planning is looking to the future, especially for families with an autistic child. Your child’s future will impact how you save and spend today. Where does your child fall on the autism spectrum? Will they be able to obtain secondary education after high school, hold down a job and live independently (even with some help)? Or will they need more care and services as an adult so they will continue to live with you, a family member or eventually a group home? Or are they somewhere in between? The answer to this important question will have a big impact on how you plan your finances for the future.

2. Figure out your current net worth

It’s important that you know where you stand currently with your finances. A good way to do this is to determine your net worth.

Net worth is simply your assets minus your liabilities. Assets include savings accounts, retirement funds, investments, home value, etc. Liabilities include credit card debt, student loans, car loans, mortgage, etc. Here is a good template to use when determining your net worth.

I recommend completing the template on a quarterly basis, but at minimum, determine your net worth at least annually.

3. Determine your annual, five-year and long-term financial goals as a family

Once you know where you stand financially, it’s easier to make your financial goals for your family. What do you want your money to accomplish in the next year? Maybe you want to pay off a credit card, increase your emergency fund by a certain amount, take a vacation (small or big) and pay for Christmas gifts all with cash.

For five-year goals, think about a down payment on a house, reaching a certain savings goal with your children’s college savings, pay off student loans or cash flow home improvements.

Long-term goals may focus on retirement planning, college savings, estate planning and special needs trust for your child.

4. Make a plan to reduce any debts

If you have debts, one of the best things you can do is include goals to reduce them. Whether you have student loans, car loans, medical expenses, credit cards, personal loans or other debts, focus on decreasing those. Each loan includes interest. That means the loan cost is much greater than the principle amount you needed to cover the expense. Personal loans also have emotional and relational costs if those were taken out through a family member or friend.

Two popular ways to tackle debt include the debt snowball and the debt avalanche. What are these two approaches?

• The debt snowball method includes tallying your debts by amount, smallest to largest. You begin by focusing on the debt that has the smallest amount. You throw as much money as you can to pay off that debt while still paying the minimum amount on your other debts. Once you pay off the first one, you roll the money that you were paying on that one into paying off the next smallest debt. You keep using this process until you’ve paid off all your debts. Psychologically, some people prefer this method because they see the number of debts paid faster because you work from smallest to largest.
• The debt avalanche method is similar, except that you order the debts from highest to lowest interest. The pay-off approach is the same. However, you put more money toward paying off the debt with the highest interest first. Many times, this is credit card debt. This allows you to pay off the debts with the highest interest first, saving you more money overall.

When my husband and I were paying off debts, we took a combination approach. We started with the credit cards (which had the smallest amounts plus the highest interest rates), and we paid those off first. Then we tackled a motorcycle loan and student loans. Finally, we focused on paying off our car loans. Currently, all we have is a mortgage, and we pay additional on the principle each month to pay it off way earlier. We bought our current home in 2018, and we’ve already reduced the length of the loan by about three years by paying more each month. That will save us a big amount in interest if we keep paying at this rate.

5. Ensure you have the proper amount and type of insurance for both parents

Whether you and your spouse both work or if one of you stays home to care for your child(ren), be sure you have the proper amount of insurance for both of you. That includes life and health insurance for each of you. It also covers disability insurance for one or both of you, if you are working at a job outside of the home (or are self-employed). If you have your own business (primary or side hustle), be sure you have the proper business insurance.

6. Be sure your estate is in order

With a special needs child, it’s especially important that you have your estate planning done.These include a will, power of attorney, living will, guardian designation for your children and more to be sure your family is protected upon your death. This is an important part of financial planning for families with an autistic child.

If you don’t have these in place, make one of your financial goals to contact an attorney in your area as soon as possible and put these into place.

7. Evaluate your savings plans for your goals

Savings of different types play a big role in financial planning and creating a strong foundation for your money. It also allows you to build wealth over time.

Having an emergency fund of three to six months income is so important! It can act as a buffer when a medical or expense arises that you hadn’t planned for or anticipated. We can always expect that unplanned for costs will happen from time to time. An emergency fund allows you to cover it without going into debt.

Retirement planning also is a key to your financial plan. Whether you save through a 401(k) plan through your employer or an individual retirement account (IRA), it’s important to do so as early as possible. (Those accounts are for those of us who live in the United States. I know other countries have their own types of accounts for retirement savings.) The longer you put money into a retirement account, the more you are able to grow it through compound interest over your lifetime. If your employer offers matching funds of a certain percent, that is free money toward your retirement. Even if you feel like you cannot put much into your retirement account, put at least enough to obtain the employer match. Also, every little bit helps when it comes to retirement planning.

What other types of savings do you need? Are you saving for a down payment on a home? Do you have sinking funds in your budget to account for quarterly, semi-annual or annual expenses? Do you have any investments other than retirement? What about college savings plans for your children? Think broadly about what you want to save for in your financial plan.

8. Keep track of daily spending

As a personal finance geek, I am weird in that I love budgeting. (Yes, I know that many people view “budget” as a four-letter word!) I have found that it gives me more freedom in my spending and helps me to create a spending plan for our family. That allows me to not only budget for the normal monthly expenses but also put away rainy day funds to cover costs the come up infrequently or unexpectedly. For budgeting, we love You Need a Budget (referral link), also called YNAB. YNAB does have a cost. However, I found it pays back dividends in how well we are able to track and plan our expenses. Other free options in Every Dollar from Dave Ramsey and Mint.com.

There are so many ways to save money! However, the first step is to evaluate what you are spending and determine how you can trim your expenses. Do you spend too much on groceries? (With two teenage boys, this is an area we struggle with in our budget!) Could you switch to generics, change to a less expensive store like Aldi or use coupons if you don’t have a discount grocer near you? Do you eat out too much? To reduce takeout, could you batch cook on the weekends and freeze dinners to eat later. Is your electric bill sky high? Could you make a concerted effort to turn off lights, lower your temperature for heating/increase it for cooling or choose energy efficient appliances when they need to be replaced?

One way to gain ideas for how reduce spending and live more frugally is to follow some personal finance blogs. Some of my favorite are Frugalwoods, The Simple Dollar, Frugal Girl and The Penny Hoarder.

9. Determine if you are making the most of insurance and government benefits to cover care and services for your child

If caring for your child does not allow you to work enough hours or hold a job that brings in enough income for living, you need to first research your assistance options through your state. Many programs provide a safety net for families when they are needed. They can be key in helping you to overcome the financial burden of autism.

Applying for a Medicaid autism waiver takes some time – completing the forms and being put on the waitlist for the waiver, but it offers so many benefits. The waiver is generally not based on financial need but on the medical needs of the patient. Therefore, even if you make a decent income, your child may be eligible for the waiver, depending on which state you live in.

I know the waiver has been really helpful for covering services for our son J that aren’t usually covered by traditional insurance. He received a few years of music therapy through the waiver, which has been such a great way to help him cope with anxiety from his autism. It also covered summer camp because it was run by a provider for patient assistance and care services. He also has received behavior therapy that was in addition to seeing his normal therapist through our traditional medical insurance.

Your state deternines the type of services and the amount provided for each child. You also work with a case manager who helps to arrange and manage your child’s care that they receive through the waiver.

I was hesitant to apply because the wait was so long when J was young. However, our state received some funding that allowed them to eliminate the backlog, so he received the waiver so much earlier than we thought. We also were able to receive more services – such as music therapy – than we would have since those are covered by the waiver but not our insurance.

Depending on your child’s level of disability and your family’s financial status, your child also may be eligible for Supplemental Security Income (SSI). You can find out more here. This can be important for financial planning for families with an autistic child.

10. Consider long-term steps for your child’s future

If your child will need substantial financial help, care and services in the future, it’s important to start planning for those now.

For example, do you need to set up a special needs trust for your child? There are three types of special needs trust funds. Those include:

• First Party or Self Special Needs Trust Fund – This type of fund is created by assets owned by the person who has autism, and they are the beneficiary. These could be from an inheritance or another event such as a personal injury settlement. The fund must be created when the person is under 65 years of age and is considered irrevocable or cannot be changed. When the person dies, payment to Medicaid is required before distribution to anyone else.
• Third Party Special Needs Trust Fund – This fund is created by assets owned by someone else other than the person with a disability, such as a parent, grandparent or other person. This can be established either during the creator’s lifetime or as a part of their will. It is managed by someone other than your child, and it’s not considered their asset. That means they remain eligible for government assistance that requires them to have limited assets. This type of fund does not have to pay Medicaid upon the beneficiary’s death. Instead, the remaining funds can be distributed to whomever the creator designates.
• Pooled Special Needs Trust Fund – This type of fund is usually run by a nonprofit organization that acts as the trustee. For this fund, the organization “pools” assets from many different people into a master trust, and then it manages sub-trusts for the various beneficiaries. This type of trust can be helpful for those who do not have many assets to set up a trust individually for their child. This type of trust has a similar requirement as the self-special needs trust because it requires Medicaid be paid first upon the beneficiary’s death.

For more information about special needs trust funds, read this blog post.

Another financial option for your child may be the 529 ABLE (Achieving a Better Life Experience) account if your child is eligible.

Also, will your child be able to make their own financial and medical decisions when they turn 18 years old? If not, then will you need guardianship or would supported decision making with a healthcare proxy work? Find out more about your and your child’s options.

Do you have any additional steps that you take when financial planning for families with an autistic child? If so, what has worked well for you? Leave a comment below so that we can share and encourage each other along this journey.

References:

Tara A. Lavelle, Milton C. Weinstein, Joseph P. Newhouse, Kerim Munir, Karen A. Kuhlthau and Lisa A. Prosser, Pediatrics March 2014, 133 (3) e520-e529; DOI: https://doi.org/10.1542/peds.2013-0763.

Zuleyha Cidav, Steven C. Marcus and David S. Mandell. Pediatrics April 2012, 129 (4) 617-623; DOI: https://doi.org/10.1542/peds.2011-2700.

Ariane V. S. Buescher, MSc¹; Zuleyha Cidav, PhD^2,3; Martin Knapp, PhD¹; et al David S. Mandell, ScD^2,3. JAMA Pediatrics. 2014;168(8):721-728. doi:10.1001/jamapediatrics.2014.210.

Hartley, S. L., Barker, E. T., Seltzer, M. M., Floyd, F., Greenberg, J., Orsmond, G., & Bolt, D. (2010). The relative risk and timing of divorce in families of children with an autism spectrum disorder. Journal of Family Psychology, 24(4), 449–457. https://doi.org/10.1037/a0019847

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This is something I’ve been thinking about more and more as our son J gets older. He is high functioning, and I think he will be able to live independently. Yet, given the statistics around unemployment for those on the spectrum, I am concerned he may need more help. Researching special needs trust funds is something I’ve needed to do for a long time. Therefore, I am happy to share what I’ve found with you.

Types of special needs trust funds

There are three types of special needs trust funds. Those include:

• First Party or Self Special Needs Trust Fund – This type of fund is created by assets owned by the person who has autism, and they are the beneficiary. These could be from an inheritance or another event such as a personal injury settlement. The fund must be created when the person is under 65 years of age and is considered irrevocable or cannot be changed. When the person dies, payment to Medicaid is required before distribution to anyone else.
• Third Party Special Needs Trust Fund – This fund is created by assets owned by someone else other than the person with a disability, such as a parent, grandparent or other person. This can be established either during the creator’s lifetime or as a part of their will. It is managed by someone other than your child, and it’s not considered their asset. That means they remain eligible for government assistance that requires them to have limited assets. This type of fund does not have to pay Medicaid upon the beneficiary’s death. Instead, the remaining funds can be distributed to whomever the creator designates.
• Pooled Special Needs Trust Fund – This type of fund is usually run by a nonprofit organization that acts as the trustee. For this fund, the organization “pools” assets from many different people into a master trust, and then it manages sub-trusts for the various beneficiaries. This type of trust can be helpful for those who do not have many assets to set up a trust individually for their child. This trust type also requires Medicaid to be paid first upon the beneficiary’s death.

Benefits of special needs trusts

While you are able to care for your child, you are able to help provide and pay for the extras your child needs. That includes education programs, therapies not covered by Medicaid, or other assistance. But after you are gone, your child may not be able to fund those on their own if they cannot live independently and is relying on government and other assistance.

The benefits of a special needs trust for your autistic child include:

• Protecting your child’s financial assets from others who may misuse them.
• Providing additional assets available to them to pay for therapies and other living expenses not covered by government assistance. Most government programs require participants to have no more than about $2,000 in assets to qualify. That isn’t much. While those programs will cover the basic costs of living such as housing subsidies, food and medical care, it doesn’t cover anything else.
• Enjoying the peace of mind knowing that your child will have additional money available for transportation, self-care, education, entertainment, caregivers and more that will provide them a higher quality of life.
• Knowing that you are not putting an extra burden on your other children or family members to provide for your child once you are no longer able to do so.
• Protecting the assets of your child by placing them within the trust.

Money needed to fund the trust

So where does the money come from? It could be assets that you already own that you place into your funds. You could form it through your estate upon your passing. Many times, people use life insurance policy payouts after they pass as the assets for the trust.

How you start a special needs trust fund

To establish a special needs trust fund for an autistic child, you need to work with a lawyer in your area that specializes in these types of funds. The lawyer will walk you through the process such as writing a letter of intent for your child and setting up the trust fund itself.

To find an attorney near you, check out the Special Needs Alliance’s “Find an Attorney” directory.

Have you already set up a special needs trust fund for your autistic child? If so, what advice do you have for others? Leave a comment to share with and encourage other parents and caregivers who are on this journey.

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