Five financial planning tips for parents of children with additional needs
Jonathon Jay, Partner with DSW Wealth Planning, is the Father of a young autistic child and works with clients in a similar position. Here he identifies five areas to consider with your financial future when you have a child or young adult with additional needs.
1. Wills
Make sure you have one. Passing away without a Will can potentially be very difficult for those you leave behind, especially if there are any specific needs for family members. Work with a solicitor who has experience with family members with additional needs, including specifically Discretionary Trusts. It’s not an easy area to navigate, and an experienced solicitor will help avoid potential pitfalls. Ensure any means-tested benefits are fully considered.
2. Power of Attorney
This needs to be undertaken and ideally with the Solicitor who draws up your Will. This ensures that if you lose mental capacity, you have appointed a trusted individual(s) to make financial and health related decisions on your behalf – including how to financially support your child or young adult.
3. Lasting Power of Attorney
If your young adult has capacity to undertake this, try to ensure they make a Health & Welfare Lasting Power of Attorney as soon as they reach 18 as this is the age when Social Services support stops.
4. Financial Planning
Work with a Financial Planner who provides you with a Financial Plan. This will help you visualise the future and understand the impact of your decision making around money. You will need to consider potential care costs or any other financial decisions to support your child or young adult. Ensure you work with a Financial Planner who understands and has experience with this. They may have come across aspects with other clients that could be very helpful and valuable for you too.
5. Investments, Pensions and Capital
It’s not advisable for a child or young adult with special needs (physical or learning difficulties) to have any form of investment or pension set up directly. Provision should be made via a Trust – and as above, the Solicitor should have specific knowledge of Discretionary Trusts and Section 89 Trusts. The child or young adult should not hold more than £6,000 in capital in their own name, as beyond this can impact their benefit entitlement.
If you have any concerns of your own and you would like to spend some time chatting them through, I’d be more than happy to do so and point you in the right direction if you need support.
Important Notes
DSW Wealth Planning is a trading name of Dow Schofield Watts Wealth Planning LLP which is an appointed representative of Corbel Partners Limited which is authorised and regulated by the Financial Conduct Authority.
The Financial Conduct Authority does not regulate Trusts, Wills and Power of Attorney.
