A care plan can make providing long-term support for a disabled family member easier. This plan can include preparing for financial security and saving in tax-advantaged ABLE accounts. It may also involve creating a special needs trust. This planning is essential if the disabled person lives alone and does not have access to a bank.
ABLE accounts
Setting up an ABLE account for a disabled family member or friend is a great way to secure future resources for their care. These accounts allow disabled individuals to save money and access tax-deferred funds. This means that the money will come out of the account tax-free when used to cover qualified expenses, such as transportation, assistive technology, health and wellness, housing, and employment support. If the funds are not used for qualifying expenses, they are subject to tax plus a ten percent penalty.
The Achieving a Better Life Experience Act, also known as ABLE, was passed by Congress in 2014. This act provides tax-advantaged savings plans for disabled individuals. These plans are similar to 529 college savings plans. An ABLE account is an excellent way to plan for a disabled loved one’s future care, and they can supplement a special needs trust.
Special Needs Trusts
It is important to have solid financial planning for people with disabilities. You can set aside funds for your impaired loved one’s future care through a special needs trust. A trustee holds the assets of the faith. This individual is frequently a relative, a close friend, or an independent professional like a banker or attorney. The trustee’s responsibility is to manage and invest the trust funds in the disabled loved one’s best interests. The trust can pay for personal care attendants, vacations, home furnishings, out-of-pocket medical expenses, education, recreational activities, vehicles, physical rehabilitation, and more.
A special needs trust is a valuable financial planning tool for families unsure how to pay for a disabled loved one’s care. Although it’s possible to transfer assets directly to a disabled loved one, it’s best to designate a beneficiary who will receive the funds. As long as you’ve carefully thought out the details, a Special Needs Trust can help you plan for your disabled loved one’s future care.
Estate planning
If you have a disabled loved one, making estate planning for their future care a priority is essential. You can do so by establishing an advance directive or living will. These documents outline what you want to be done after you pass away and who should handle any issues with your estate. It is also essential to designate guardians for minor children. These documents can provide peace of mind for everyone involved, including your loved one.
Special needs trusts are one option for funding the care of a disabled child. They can be funded with money from your will, current savings, and even live insurance policies. However, it would help if you had a lawyer familiar with special needs trusts and how they work. You must also ensure that your disabled loved one has little or no personal property.
Life insurance
Life insurance is an essential component of any special needs financial plan. It protects your family if you die prematurely or your disabled loved one requires long-term care. In addition, life insurance can help you meet daily living costs. It also provides financial security for your disabled loved one if something unexpected happens.
Life insurance coverage is one of the cheapest ways to protect your dependents. You can customize your policy to meet the needs of your disabled loved one. You can even use a calculator to determine how much coverage you need.
HCBS waivers
In 2017, HCBS waiver waiting lists in 40 states numbered approximately 707,000 people. Most of these individuals were people with disabilities or I/DD. Seniors and adults with physical disabilities made up over one-quarter of the total enrollment. The data do not directly compare across states, however.
The HCBS waiver is a federal law that allows states to offer a certain level of care to individuals who would not otherwise be able to pay for it. The waivers allow states to create additional criteria for eligibility. An individual must show a need for institutional care and must meet specific requirements. The state also sets the maximum number of people it will serve.
If you are a person who has a disability and needs assistance with daily living activities, you should look into HCBS waivers as a way to pay for care that Medicare does not cover. These programs offer a variety of services, both medical and non-medical. These services may include meal delivery, transportation, and assistance with daily activities.