Financial planning mistakes that parents with disabled children typically make
Raising a child with a disability brings with it not just emotional challenges, but also financial ones. The needs vary, depending on the kind of disability. Children with learning disabilities can be helped out with certain accommodations in school, while those with severe cognitive or developmental disabilities would need extensive therapies, medication, even 24-hour care.
In these circumstances, it becomes crucial for parents to plan for the future in such a way that the child has the resources to live independently. Like Gopal and Gita Sehgal have done for their son Gaurav, who has Down syndrome and thyroid problems.
Gaurav, who is in his 30s, completed his schooling and worked at McDonalds, where he performed basic tasks. He later quit and now stays at home. The Sehgals, who are based in Mumbai, have a financial consultant, who manages their investments, which include bonds, Mediclaim policies and fixed deposits to ensure Gaurav is well provided for.
“We have planned in a manner keeping in mind that Gaurav will need assistance for the rest of his life. The products we have invested in are such that he will be financially secure, always. This also gives us great peace of mind,”, they say.
It’s an approach that financial planning expert Jitendra Solanki says is critical when you are raising a child with a disability. Solanki is passionate about helping such families to take away their anxieties and that led him to start PlanSpecialNeeds, a website that aims to empower them.
Solanki says the idea was born after watching the struggles that families of children with disabilities experience. His wife, who is an occupational therapist, played a strong part in pushing him to act in this direction as well.
A special needs family requires a proper guidance as there are emotional and financial aspects involved in planning. A comprehensive special need plan encompasses financial aspects, legal planning matters, emotional concerns along with social and family support needs. – Jitendra Solanki, Financial planner
Solanki has recently published a book on the same matter. Called Planning for Special Needs Children Families,it guides families about the various aspects they need to look into while planning for the lifelong needs of a child with a disability.
He lists some of the common mistakes families make when it comes to planning for the future.
- Inadequate insurance for protecting various risks.
- Inadequate cash reserves to take care of emergencies.
- Heavy debt like housing, car and personal loans.
- Taking health insurance for the child by suppressing information about his/her disability.
- No estate planning documents such as a will, trust etc. prepared. This leaves the child dependent on others.
- Not identifying the person who will become guardian of the child after their lifetime.
- The child is designated as beneficiary in all the assets despite knowing he/she cannot take decisions.
- Too many therapies for the child in belief of faster improvement.
- No legal guardianship certificate prepared. Many parents are unaware that they are no more the legal guardian once child reaches 18 years of age.
- Lastly, most parents avoid retirement planning.
Solanki advises families to start planning as soon as the child’s disability is identified. “This is because it takes years to accumulate wealth and unless you give sufficient horizon to your savings you will end up with less money for your child’s future. Also, for a special needs parents it’s difficult to rely upon others for child care after them. Hence, they have to create provisions for occurrence of any eventuality.”
Planning ahead can help provide peace of mind. As Archana Mishra, mother to a child with autism puts it, “It is very hard at the start but as you do it regularly and consistently, it gets much easier.”
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