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5 Money Mistakes Parents of Special Needs Kids Make

5 Money Mistakes Parents of Special Needs Kids Make

Children with special needs require a lot of attention and care, so parents need to be extra careful when planning their future so as not to make any plans that will put their child in jeopardy or have a serious, long-lasting effect on the child.

In some instances, when the child grows, he or she may not be able to qualify for vital benefits from the federal government or the parents might die without making monetary provisions for the child. This article is centered on parents of special needs kids and the mistakes they make when planning their estates.

1. Disinheriting the Child

When children with special needs reach adulthood, they tend to rely on the federal government to help with their fundamental needs like food and shelter. This is often done through federal means-tested programs (a program in which the recipient’s financial resources determines the eligibility) like Supplemental Security Income (SSI) and Medicaid.

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Parents are often advised to disinherit their child to enable them to qualify for the federal programs. This advice is not really the best for a special needs child because these federal programs offer very low finances. A special needs child may not be able to work to get additional money to help out like their counterparts who do not have special needs.

It is more advisable for the parents to open a Special Needs Trust (Supplemental Needs Trust) for their child. The parents can put money in the trust for their child without any risk of disqualifying the child from benefitting from federal programs.

Other family members or well-wishers can also leave money in the trust or set up another one. Also, if the parents die or become impaired, the child’s trust will be able to support the child.

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A Special Needs Trust needs to be set up by an experienced attorney to avoid complications. It is important not to do it on your own; an attorney can help you align your life insurance, retirement accounts, and other beneficiary accounts with the Special Needs Trust of your child.

2. Procrastinating

Parents need to plan in advance for a time when they’ll die or simply won’t be able to cater financially for their child. Since nobody knows what could happen tomorrow, the earlier we plan, the better we can secure our children financially. Parents who do not plan ahead could die and end up leaving their special needs children with no resources to maintain the standard of living they were used to. Especially for parents who own businesses or do freelance work, setting up automatic systems for taking care of business concerns needs to be done today, not tomorrow.

3. Not Making Your Planning a Team Effort

Parents cannot work alone when making an estate plan for a special needs child. The process is very complex and therefore requires the services of people experienced in special needs planning to make sure the plan goes well. They need an attorney with experience in special needs, a life insurance professional that will help plan the money needed to increase the benefits needed for the child, a CPA to prepare the tax return of the trust, an investment adviser to manage the finances so that the money in the trust fund will last for the whole of the child’s life, and also any other advisers that may be able to help in the success of the trust.

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4. Ignoring the Particular Needs of a Special Needs Child

Plans that are focused on the particular needs of a special needs child have to be made. If the planning doesn’t meet their needs, the child will not qualify for government benefits. Setting up a proper Special Needs Trust will satisfy the child’s needs and also allow the child to be eligible for benefits. The trust must satisfy a lot of needs, like medical bills, annual check-ups, any special equipment (like a specially equipped van), training, education, insurance, transport, and feeding.

A properly funded Trust will go much further in providing the child with electronic equipment, appliances, and computers, fund vacation trips for them, allow them to go to the cinema and have a good living situation, and provide many other things that a parent wishes for their child to improve their quality of life.

A generic or “form” special needs trust has very strict distribution policies, and so the child may not be exposed to some things that he or she would normally have enjoyed.

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5. Including a “Payback” Provision in the Trust

Payback in the trust means that if the child dies, any money remaining in the trust is given to the government and not the family. This payback clause is a mistake made by most parents. An experienced attorney can be employed to make sure that money left goes to the family instead of the government.

Featured photo credit: Visit St. Pete/Clearwater via flickr.com

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Published on July 4, 2018

Top 10 Recommendations on Money Management Apps

Top 10 Recommendations on Money Management Apps

Don’t want to overspend your budget, swipe your credit card too many times, and feel like a financial mess? Instead of beating yourself up for the bad financial decisions you’ve ever made, create a new plan!

The solution is simple, save more and spend less. But, we all know it’s easier said than done.

One problem is finding quality apps that save you time and money, and aren’t just hype.

Luckily, there’re many great money management apps available at your fingertips. Here are 10 reliable money management apps that can help you save money, and crush debt.

1. Personal Capital

    When was the last time you’ve tracked your net worth? Probably months ago or maybe never. Personal Capital allows you to easily track your net worth and plan for retirement.

    Here are some of its main features:

    • Sync many investment accounts, and expenses (mortgage, credit cards, etc.) in one place
    • Discover hidden fees and how much they’re affecting your retirement plan
    • Wealth management for investors requiring a long-term strategy

    With Personal you’re free to track your expenses and net worth.

    Available for: iOS and Android

    2. Mint

      If your smartphone could only install a few apps, Mint would be one of them. Why? Because Mint tracks all your balances and bills in one place.

      Here are some of its main features:

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      • Effortlessly track all your bills and balances in one dashboard
      • Categorized expenses to understand where you spend your money
      • Uncover hidden fees, and determine your investment style with sophisticated retirement tools.

      Feel at ease with managing your money by a reputable company that isn’t going anywhere.

      Available for: iOS and Android

      3. YNAB

        Everyone needs a budget, there’s no way around it. YNAB (You Need A Budget) is an easy to use app that will change the way you think about money. Their motto is to “give every dollar a job”, and you’ll quickly discover why.

        Here are some of its main features:

        • Easily sync all bank accounts in one place
        • Visually see your debt paying progress with eye-catching charts and notifications
        • Customized categories setting saving goals

        The best part about YNAB is the community that comes along with it. You can hop on the YNAB forum to receive support, listen to the YNAB Podcast or stay tuned for their weekly videos.

        Available for: iOS and Android

        4. Wealthfront

          Albert Einstein once said “compound interest is the eight wonder in the world”, and for a very good reason. The problem is, most people are scared or unwilling to learn the basics of investing. This is why Wealthfront is the perfect solution for the hands-off investors.

          Here are some of its main features:

          • Variety of investment account options including IRA, Roth IRA, and more
          • Your portfolio composed of 7 different asset classes
          • Automatically rebalanced portfolio
          • Daily tax loss harvesting

          Wealthfront is perfect for people requiring investment guidance, or prefer a hands-off solution.

          Available for: iOS and Android

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          5. Clarity Money

            If you’re staying on top of your budget but want to take your finances to the next level, Clarity Money can help you. Clarity Money helps you stay under budget and build a personalized savings plan.

            Here are some of its main features:

            • Easily cancel subscriptions with one click
            • Synchronize bank accounts fast
            • Transfer money effortlessly between different accounts

            Clarity Money isn’t an app that does it all. But, it does make transferring money and canceling subscriptions fast and efficient.

            Available for: iOS and Android

            6. Acorns

              What if there was a way to quickly gain confidence in investing your money, without too much risk? There is, and Acorns is your solution. With Acorns’s technology, you’re able to make investments as small as $5.

              Here are some of its main features:

              • Automatic contribution option
              • Customized portfolio tailored to your needs
              • Low management fees ranging from $1-$2 per month

              Stop wasting dollars on expensive coffee. Instead, invest them towards a brighter financial future.

              Available for: iOS and Android

              7. Albert

                Do you budget by only subtracting your expenses from your income? If so, how would you discover any overpayments or extra money you could save? This is where Albert shines, and it does it all free.

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                Here are some of its main features:

                • Receive notifications for overpayments, hidden fees, and low balances
                • An Automatic budget that’s built around your spending and income
                • Easily track debt and set new financial goals

                While Albert does offer a paid option, most of its core features are FREE. So, what better option to save?

                Available for: iOS

                8. Prism

                  Have you recently forgot to pay a bill because life got in the way? Prism automatically tracks your bills and syncs your bank accounts in one place.

                  Here are some of its main features:

                  • View all your account balances in one glance
                  • Bill due dates are automatically pulled and tracked
                  • Receive early reminders for upcoming bills

                  If your budget is on “fleek” but can’t seem to stay on top of your bills, Prism is your go-to app.

                  Available for: iOS, Android, Windows, Amazon

                  9. Mvelopes

                    Remember hearing about people using envelopes to budget their money? Well, Mvelopes is the new envelope system for this generation. Easily create monthly budgets and track your saving goals.

                    Here are some of its main features:

                    • Connect unlimited bank accounts
                    • Real-time budgeting with auto transaction syncing
                    • Low monthly $4 fee or $40 annual

                    Mvelopes can help you crush debt, save more, and help you stop overspending. With its low monthly fee, it’s worth a try.

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                    Available for: iOS and Android

                    10. Wallaby

                      Most people don’t have time to track their credit card’s changing rewards and interest rates. Because of this, you need help reaping the most of your credit card’s rewards. Wallaby is the app that will help you do just that.

                      Here are some of its main features:

                      • Automatic recommendations for the best credit card to use for each transaction
                      • A friendly user interface, displaying credit cards with their corresponding images
                      • Free to use

                      If you’re using the same credit card to make your purchases, you may be leaving money on the table. Give Wallaby a try if you’re ready to maximize your credit card’s rewards.

                      Available for: iOS and Android

                      Take control of your finances and experience financial freedom

                      Picture yourself staying on budget and saving more money than you’d ever imagined.

                      It took hard work and dedication but you’d finally learned how to manage your money. You have to start taking control of your spending and saving habits.

                      You now have a list of reliable apps that can help you build better money habits, what are you waiting for?

                      Featured photo credit: Pexels via pexels.com

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