Divorce: Taking a special needs child into account

Divorce is one of the most stressful life transitions a person can go through, but that stress isn’t the same for everyone. Your divorce can be significantly more stressful if children—particularly those with special needs—are involved. Considerations for divorce when a special needs child is involved - photo illustration 1 Mosaic Financial Partners

Children should always be a focal point of any divorce proceeding. But children with special needs change how a divorce should be negotiated, so let’s break down some of the unique considerations that need to be taken into account if a special needs child is part of a household that is divorcing. 

 

Planning for a lifetime, today

It’s not enough to simply plan for the present; the future must also be taken into account. An individual’s special needs may be physical, developmental, or cognitive in nature, but regardless of the nature of these needs, they will likely exist for the child’s entire life. For parents, this can mean the child will need caregiving support not only to age 18, but possibly for the remainder of their life. Provisions for this support need to be taken into consideration and included in any divorce agreement with specific details.

It should not be assumed that all family law attorneys know the intricate details of special needs planning and navigating the social benefit programs that are available. You may need to hire someone in addition to your divorce attorney to assist in creating a plan that will set up the road map to assist throughout the child’s life.

 

Understand how finances impact government benefits

A financial professional with expertise in helping with divorce negotiations and special needs planning can help you know what to ask for in the divorce decree that will be needed to support the special needs child, help you to understand what government benefits the child is qualified for now, and help you map which benefits they will qualify for later, including how those benefits will shift as they age.

For example: a special needs adult is allowed a place to live, a car for transportation, and a prepaid funeral arrangement, but other assets beyond a place to live and an automobile for transportation purposes in excess of $2,000 cannot be owned directly in the special needs individual’s name without the risk of losing their government benefits.   

Considerations for divorce when a special needs child is involved - photo illustration 2 Mosaic Financial Partners

This means that a well-intended parent who purchases a life insurance policy in order to supply resources for their child in case of their premature death could inadvertently disqualify their child from government benefits just by making them the beneficiary of the policy. 

That’s why it’s best to own a policy for this purpose inside a special needs trust. Special needs trusts are drafted by an attorney and are funded using products like life insurance to supplement the child’s government income. They allow a trustee—other than the child—to issue money in increments to support the child throughout their life.

 

Taking the necessary amount of time

The above are just a few examples of considerations you must take into account during a divorce. Planning for a special needs child will have its own priorities within the divorce process.  And while every divorce is different, there are aspects of divorce that need to be thought through differently than just pure division of assets and custody arrangements. 

Seek advice from professionals with specific training to make sure you and your children are treated fairly during the process. Always remember: expert advice is out there, and at this difficult moment in your life, you shouldn’t feel you have to go it alone.

 

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Topics: Financial Planning