How do you plan for the possibility your child might not live an independent life?

As you heard in the video above, Lisa has a special needs child; her son Will, 11, has autism. We’re hearing more and more about autism these days, not just because celebrities like Toni Braxton and Jenny McCarthy are speaking out about their own kids, but because the disorder is the fastest growing developmental disability. About 1 in 88 children has been identified with an autism spectrum disorder, according to estimates from the CDC’s Autism and Developmental Disabilities Monitoring Network.

Of course, autism isn’t the only special need: About one in six children have a developmental disability of some kind, says the CDC. That’s a stressful thing for parents, emotionally – but also financially. Very careful planning is necessary when you have a child who may need care well into his adult years.

How do you plan for that kind of future?

  • Consider putting together a special needs trust. Lisa has one for Will, and for good reason: a special needs trust allows parents to put aside money for future care of your special needs child, so it is available to him or her after you pass away. The kicker: It could protect the child’s eligibility for benefits like Supplemental Security Income and Medicaid. Money in other accounts could render your child ineligible for these government benefits, which could be crucial to their care. An estate planning attorney, or a planner or attorney who specializes in special needs planning, can help you set up and fund the trust. (Do not try to do this on your own.)
  • Select guardians. This isn’t a process that is unique to special needs children, but you’re selecting guardians for what may be a longer time horizon – instead of picking someone who can step in and care for your kids until they turn 18, you may be tasking someone with care taking for several decades. It makes the process a little more difficult, and it means that the person you choose needs to be very clear on – and comfortable with – their role.
  • Research. As your child approaches adulthood, you should start researching what his or her options are. is one good place to start. The website has sections on employment for special-needs adults, housing, education, benefits, transportation, and any other service you might want to look into to. You can research jobs that might cater to someone of your child’s ability level, as well as training programs and educational opportunities.
  • Play it safe. You may not know if your child will want to – or be able to – attend college, but if you’re like Lisa, you want to save for the possibility just in case. Lisa has two children, and has opened 529 plans for both of them. The thinking is that if one doesn’t use the money, she can pass it on to the other. But if you only have one child, you may want to save in a Roth IRA*, which can be used for education or your own retirement.

*Qualified Roth IRA distributions are not subject to state and local taxation in most states. Qualified Roth IRA distributions are also federally tax-free provided a Roth account has been open for at least five years and the owner has reached age 59 or meet other requirements. Withdrawals may be subject to a 10% Federal tax penalty if distributions are taken prior to age 59.

Jean Chatzky

About Jean Chatzky

Jean Chatzky, the financial editor for NBC’s TODAY show, is an award-winning personal finance journalist, AARP’s personal finance ambassador, and a contributing editor for Fortune magazine. Jean is a best-selling author; her eighth and most recent book is Money Rules: The Simple Path to Lifelong Security. She believes knowing how to manage our money is one of the most important life skills for people at every age and has made it her mission to help simplify money matters, increasing financial literacy both now and for the future. In April 2013 Jean launched Jean Chatzky's Money School , a series of college-style, interactive online personal finance courses that give men and women across the country the opportunity to learn from and interact directly with her. Jean lives with her family in Westchester County, New York.
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