When thinking about what it takes to care for a child with special needs, you might expect that it requires a lot of love, patience and moral support.
In many cases, it can also be a major financial commitment that requires a lot of planning for the future, said Rick Strutt, a financial advisor and retirement specialist for CIBC, and a father of a child with special needs.
Strutt’s 18-year-old son, Tyler, who is globally developmentally delayed and non-verbal, needs help with all his activities and his daily living, and will require financial support for his entire life, he said.
Strutt volunteers with Community Living Toronto, a social service agency that advocates for people with intellectual disabilities, and he lectures at the Holland Bloorview Kids Rehabilitation Hospital on the subject of financial planning for families with special needs children
He spoke last week at the Current Trends in Paediatric Neuro-Developmental Disabilities conference, held at the Schwartz-Reisman Centre in Vaughan, Ont., outlining some of the things parents can do to provide their children with financial security for years to come.
He told The CJN that when parents come to meet him seeking financial advice for their special needs children, they often talk about present-day issues, like the cost of therapy and access to government funding, but they also worry about how to plan for their child’s future.
“You need to understand your present financial situation. Build a plan,” Strutt said.
“Sometimes when I do seminars, people’s eyes look like deer in headlights because it’s about understanding the supports and services [available] when they’re children. Then they transition out when they’re 18 or 19. What are they going to do? What are they going to do after school [post-21] if they don’t have the ability to work? And then, how will they provide for them financially? Where will they live?”
Strutt said he struggled with the same concerns when his son was growing up.
“What’s going to happen to him when I’m not around?… As a parent, that is my main concern. I’m not concerned with now. He’s a great kid, he’s enhanced our lives in so many different ways, he’s a hoot to be around, but it’s like, what happens to him when we’re not around? That is a big concern.”
Based on his experience, most parents are intimidated by the process.
“I tell them to just start with where they are today, where they’re going and chunk off things a little bit at a time,” he said.
He said it’s important for people to learn about their employment benefits, and their long-term disability plans.
“Then you have to build a team. Find a lawyer that understands it. If you’re doing a will, find a lawyer that does wills for families that have children with special needs, who is familiar with the Henson Trust,” he said.
The Henson Trust, a discretionary trust that protects the assets and inheritance of people with special needs without interfering with their right to collect government benefits, can be set up at any time, with the help of a good estate or trust lawyer, Strutt said.
“I can’t give [Tyler] the money, so what I do is, I say, fine, I’m going to put it into a trust and the trustee… [will] pay out certain expenses for Tyler over the course of his life,” he explained.
“I don’t want to leave money directly to Tyler because he’s not going to be able to manage it. You want to make sure that if you’re going to set up a trust for him, set it up, ensure that you have proper people [taking care of it] and understand what you’re trying to do, what the picture looks like.”
When it comes to government benefits, Strutt said the most significant one availble in Ontario is the Ontario Disability Support Program (ODSP), which children become eligible for when they turn 18.
“But that has limits on income and assets, so you want to be aware of the rules,” Strutt said.
“Tyler’s got a bank account, but for ODSP purposes, they don’t want him to have more than $5,000 in his bank account, because that could affect what he gets [from the government]… Realizing that the maximum they can get from ODSP is about $1,200 a month, you’re protecting their poverty income for them.”
The Registered Disability Savings Plan (RDSP), which Strutt described as “an RSP for individuals who can’t really support themselves,” is another savings plan parents should consider.
When it comes to estate planning and drafting wills, Strutt suggests that making it as current as possible is the best approach.
“A lot of people want to set up a will that is good for the rest of their lives. But who you associate with and who you want to have as guardians for your children when you’re 30 may be different when you’re 50, right?”
Strutt added that a good financial plan shouldn’t be static, and should be revisited annually.
“Have there been any material changes? Have you had another child? If you’ve got [a plan] started, you’re not reinventing the whole wheel, you’re just kind of trimming it down,” he said.
“Building a good team is really important also. Network with other parents. What other people do may not work for you but there may be portions of it that work.”
He said the biggest mistake parents make is being paralyzed by the thought of tackling these issues.
“We’re all busy. Sometimes we just look at our feet. Sometimes we don’t look at the big picture for things, and there’s a lot there for families with children with special needs, but really, the onus is on us to really put it together.”