Think about your last vacation. How much time did you spend planning your destination, how you were going to get there, and what activities you wanted to enjoy once you arrived? Most people spend more time planning their next vacation than they do creating their financial plan; the roadmap to their future and a strategy for their family’s security. Having a financial plan is important for every adult, but it’s particularly important if you have dependents and even more so if one or more of those dependents are disabled.
The Financial Planning Process is similar regardless of whether you have disabled dependents or not; Establish your goals, determine your current financial position, analyze your information to determine any shortfalls, create solutions that will enable you to overcome the shortfalls and enable you to reach your goals, take action to implement your plan and review it on a regular basis to ensure that your goals have not changed, and that you are still on track to achieve them.
Each plan primarily contains the following six components:
1. Net Worth Projections
2. Cash Flow Projections
3. Retirement Planning Strategies
4. Investment Analysis
5. Insurance Analysis
6. Estate Planning
Here’s where things begin to differ. Not only will you need to plan to support you and your spouse during your lifetime, but you will need to plan for your disabled dependent as well. Instead of providing income for 25 years after retirement, you may need to plan for your income to continue for 45 or 50 years.
Caring for a disabled dependent is often stressful as you deal with healthcare needs, additional costs for care, managing support needs, dealing with government agencies, and a myriad of other concerns. The big question is, who is going to take on these responsibilities when you no longer can? Will it be a friend, relative, or perhaps a professional? Maybe it is a combination of the three. Building a network of people to provide support while you are still healthy and involved is critical. Disabled dependents often rely heavily on their care providers. If their sole care provider is Mom or Dad and they are suddenly out of the picture, it can be devastating for them. As an example, in my own family, we had built a network of support workers for my disabled brother, while my parents were still alive, Doctors, Counsellors, Support Workers, Caregivers, family and friends. When my parents died, my brother lost his parents, but not his entire support network. He was able to cope with the loss much easier. Parents should consider aligning themselves with professionals who have experience in dealing with special needs planning, such as Accountants, Lawyers, Certified Financial Planners, Trust Officers, Counsellors, Support Workers, Caregivers and Doctors, as well as Associations, Support Groups and other related networks.
Parents with disabled dependents have to ask themselves some difficult questions:
- Who will look after my child when I die or if I become incapacitated?
- Where will they live?
- Who will take them to their doctor and therapy appointments?
- How will they pay their bills?
- My whole life has been about looking after my child, but I have other goals that I would like to achieve; How can I do both?
Most financial plans will recommend the use of Registered Retirement Savings Plans, Tax-Free Savings Accounts, insurance and Wills along with Powers of Attorney to help achieve goals and protect lifestyle. Those requiring special needs planning will likely also need a special trust referred to as a Henson Trust, Registered Disability Savings Plans, Ontario Disability Support Planning, along with other special investment and insurance options to protect and support loved ones.
The best advice for families with special needs dependents is to choose a qualified, trusted team of professionals and develop and implement a plan without delay.
Article written by: Brad Giroux, CFP, CLU, CHS
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