1. Buy enough life insurance. In the event that someone, such as siblings or other relatives has to fill in for a parent, that family will have to pay for at least some services the parent had provided when able. If the estate is not large enough for this purpose, it can be made large enough through life insurance proceeds. Premiums for second-to-die insurance (which pays off only when the second parent passes away) can be surprisingly low.
2. Set up a trust. If there are funds intended for a disabled child, from either an estate or the proceeds from a life insurance policy, they should be held in trust for his or her benefit. Leaving money for a child with a disability jeopardizes public benefits. Many people with disabilities cannot manage funds - especially large amounts. Some families disinherit disabled children, relying on siblings to care for them. This approach is fraught with potential problems. Siblings can get sued, get divorced, disagree on their responsibilities or run off with the funds. It can also cause tax problems for the siblings. The best approach is a trust fund set aside for the disabled child.
3. Create a will and appoint a guardian. While a will and the appointment of a guardian are important for anyone with minor children, it is doubly so if the child is disabled. Finding the right guardian can be difficult. In some cases, the care needs of the child may be so demanding that he or she will need a different guardian from his or her siblings. The parents need to make these determinations while they can.
4. Write down the care plan. All parents caring for disabled children are advised to write down what any successor caregiver would need to know about the child and what the parents' wishes are for his or her care. Should the child be in a group home, live with a parent, or live on his or her own? Usually, the parent knows best, but needs to pass on the information. It can be in a memo or letter and can be kept in the attorney's files with the parents' estate plan.
5. Coordinate with other family members. Even a carefully developed plan can be sabotaged by a well-meaning relative who leaves money directly to the child with a disability. If a trust is created for the benefit of the child, grandparents and other family members should be told about it so that they can direct any bequest they may like to leave to that child through the trust.