Disabled Daughter Be Independent of Goverment?

What should a parent do to ensure her disabled daughter does not need to rely on the government when she is older?

QUESTION: Chris is married, a full-time student, and has a disabled 7-year-old child.  What does she need to do to make sure her daughter does not have to live off of the government when she’s older?

ANSWER: Here are a few things you should do:

1.    Continue the baby steps.
2.    Start a college fund for your other children.
3.    Start investing money for your disabled child instead of setting money aside for her college.
4.    Take out a little more than 10 times your income on your term life insurance and designate part of that insurance to a trust for your special needs child.  That money will go to a mutual fund upon your death to take care of the child.  That money could only be used for that child by the caretakers – they would not have access to it otherwise.

At some point you’ll have enough money in the life insurance to drop it and then you need to continue investing in mutual funds.  Eventually, you want to replace insurance with investments because investments are the best wealth-building tool.  You become self-insured by long-term saving and wise financial planning.  And, even though this is a special case, it’s still very do-able. 

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