Paying for life-long care for a family member with disabilities can be financially overwhelming.
“Not knowing how your child will be cared for after you’re gone is a heavy burden that weighs on most parents of children with special needs,” said David MacLaren of Fortville, Ind., parent of four children, three of whom have special needs.
MacLaren and his wife Ann have 14-year-old autistic twin sons and two adopted daughters, one of who is legally blind. A special needs trust funded by a combination of whole and term life was just what they needed to provide for their children’s future care, while not endangering their eligibility for federal benefit programs.
We’ll take on the job of answering a few important questions like what can be purchased with a special needs trust? What’s a supplemental needs trust? What’s an SNT trust? What is a trust in general and how is it used?
“Combining a Supplemental Special Needs Trust (SSNT) with permanent life insurance, such as whole life insurance, is a powerful one-two combination that can ensure there will be financial resources available to pay for a loved one’s care over the long term,” said Kevin Clasen, a MassMutual Special Care Planner with West Point Financial, a general agency of Massachusetts Mutual Life Insurance Company.
For some families, the combination has answered their long-nagging questions and soothed their long-standing fears.
“We feel a tremendous amount of confidence and relief now that we have our plan in place,” said MacLaren. “We know who will care for our children, and how that care will be paid for.”
While there are many ways to fund trust accounts, permanent life insurance, particularly whole life insurance, is very effective.
“I consider whole life insurance to be perfect for these types of situations. Most importantly, it is permanent, so as long as the MacLarens pay the premiums, it will be there to fund their children’s future care, no matter what happens” said Drew Stuart, a MassMutual Special Care Planner at West Point Financial working in collaboration with Clasen and the MacLarens. “It’s a rock-solid foundation on which to build a plan.”
In addition, whole life insurance has other attributes that can make it ideal for families that are developing long-range plans for members with disabilities.
“Whole life insurance policies have premiums that never rise and they build up cash value, so parents or guardians can borrow from these savings in an emergency or, for example, to purchase a needed piece of equipment or specialized therapies,” said Clasen.
Creating a Supplemental Special Needs Trust and funding it with life insurance are only two parts of a comprehensive life care plan.
“Parents should take care to write and update their wills, ensuring that each coordinates with the other,” said Joanne Gruszkos, director of SpecialCare, MassMutual. “They should also consider writing a Letter of Intent that, while not a legal document, supplements the will by providing detailed information about the family member’s routines, contact information, medical issues, parental preferences for the family member’s living situation, and other such matters that are not appropriate for a will.”
Braelyn Whitford smiles after putting an ABU cap on a cut-out of her mother’s head with her father, Matt, at their home in Spokane, Washington. Braelyn is diagnosed with Kabuki Syndrome. Braelyn and her family are assisted through the Exceptional Family Member Program which connects active duty family members who have special needs with many helping agencies both on-and off-base. (U.S. Air Force photo/Staff Sgt. Desiree N. Palacios)