Monday, March 19, 2012

Life Insurance Can Be Key To Financial Planning for Your Special-Needs Child

Life Insurance's Role in Setting Up a Trust for a Special Needs Child

A brief excerpt from an article on
An attorney can help you set up a special-needs trust -- an important tool if you think your child will require government help. A special needs trust holds assets for your child, and can be named as a beneficiary for life insurance. A trustee, usually a family member, distributes money to take care of your child. When set up properly, a special -needs trust provides money to maintain your child's quality of life and preserves eligibility for government benefits.

The trust shouldn't be generic or inflexible, but designed specifically for your child, says Diedre Wachbrit Braverman, a special-needs estate attorney in Boulder, Colo.

Braverman, whose brother has severe autism, speaks from experience; she helped her parents set up a trust. She recommends working with a special-needs attorney -- not just an estate attorney. The Academy of Special Needs Planners provides a search tool to find attorneys. She also recommends finding a knowledgeable life insurance agent.

Life insurance plays an important role because most families cannot save enough money for their children's lifetime needs, and the coverage provides security in case a parent dies prematurely.
A growing number of life insurance companies have established units for special-needs planning. MassMutual started its SpecialCare program in 2004. The company worked with The American College in Bryn Mawr, Pa., to develop coursework and the Chartered Special Needs Consultant designation for agents who complete the schooling.

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