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Craig Lundquist, MBA, ChFC®, CRPC®
VP of Wealth Management
651-773-2757
Kristin Becker
Senior Administrative Assistant
651-773-2821
Ideal Wealth Advisors
Located at Ideal Credit Union
8499 Tamarack Road
Woodbury, MN 55125
CRPC conferred by College for Financial Planning
March/April 2024
Caring for a Special-Needs Loved One
Providing for a special needs child, minor or adult, can be daunting. To safeguard your child’s future well-being, work with your financial and legal professionals to help ensure you have a sound strategy in place.
A Basic Protection Structure
After security for the child, the primary point of special-needs planning is protecting the child’s eligibility for government benefits. The way to do that is to limit the amount of assets in the child’s name to $2,000 or less.Consider distribution events that could push the child’s assets over that amount. For example, make sure your beneficiary designations don’t name your spouse as primary and all children equally as contingent beneficiaries. If your child doesn’t require guardianship, have your attorney draft a financial power of attorney and health care proxy. A will may be needed, as well.
If you don’t have a special-needs trust, talk with a legal professional about creating one for the child’s inheritance. These trusts may be created with life insurance proceeds and effectively let you leave the child as much money as you want without disqualifying them for government benefits.
Available Tax Breaks
Consider income-tax breaks that may let you do more for your child. If you have someone care for your child while you work, you may be able to claim a child and dependent tax credit equal to a percentage (most likely 20%) of up to $3,000 ($6,000 if you have more than one qualifying dependent) of your expenses.If your medical expenses and those paid for your special needs dependent exceed 7.5% of your taxable income, you may be able to deduct more than the costs of your child’s doctor visits and testing. Modifications made to your home to accommodate the child’s disability, for example, may qualify. Of course, everyone’s financial and tax situations are different. Be sure to consult your tax professional before taking action.
A special needs trust that’s properly funded with life insurance benefits can provide lifelong support for a loved one’s special needs without jeopardizing government assistance such as Supplemental Security Income or Medicaid.
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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Ideal Credit Union and Ideal Wealth Advisors are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Ideal Wealth Advisors, and may also be employees of Ideal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Ideal Credit Union or Ideal Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:
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