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David P. McCabe,
WMCP®, ChFC®, CLU®
Financial Planner
Nathaniel D. High, RICP®
Financial Planner
Nicholas J. Over, CFP®
Financial Planner
Sara E. Martin
Operations Manager
Jennifer A. McCabe
Client Service Specialist
jennifer.mccabe@prudential.com
Centuria Financial Group
2333 Baltimore Blvd Suite B
Finksburg, MD 21048
Phone: 443-952-7232
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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David P. McCabe, Nathaniel D. High, and Nicholas J. Over are Financial Planners with, and offer securities and investment advisory service through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial.
LPLE and LPL Financial are not affiliated with Centuria Financial Group.
This newsletter is general educational information provided by a Prudential Financial Professional and is not intended to market or sell any specific products and services, but rather provide general information about the subject matter covered only.
Centuria Financial Group and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.
The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.