Planning For a Future With Special Needs

Jim and his wife had cancer policies, and now he's got some wealth after her death. How should he plan for his disabled son's future?

QUESTION: Jim in Evansville says his son was diagnosed with a seizure disorder several years ago along with a severe learning disability. His wife died four months ago due to a bout with cancer. Jim and his wife had cancer policies, and now he’s got some wealth after her death. How should he plan for his disabled son’s future?

ANSWER: I would just have as a part of your will a special needs trust and have enough of your assets assigned to that that they create enough income for him to live on for his care. In addition to Social Security disability, what does he need income-wise in addition to that or aside from that or not counting that for him to be okay per month if you’re not there? I would take that figure times 10 and put that many dollars in assets in the special needs trust upon your death. As an example, if it takes $80,000 a year to take care of him, then I’d leave $1 million into a special needs trust in assets. If $40,000 a year will take care of him, $500,000 will do it. My guess is it’s probably somewhere between those two. Your first $500,000 ought to go to him. Your other kids can make their way in the world. Above that, he doesn’t need any more than that, so leaving him excess wealth is also irresponsible because there’s not anything he can do with it.