Having a disabled child is a both a blessing and a burden and about which most of us have no real idea. One of the concerns parent share is how to assure enough money for the child beyond their own death.
In Canada, a recent (2007) initiative is the Registered Disability Savings Plan (RDSP) This is a program that permits capital to accumulated for a disabled person on a tax preferred basis and with government grants connected to funding. It is theoretically possible to acquire $70,000 in grants over a lifetime. Not shabby!
When the RDSP is added to the maze of programs and trusts and other arrangements that are in vogue, it is possible that a disabled person could enjoy an adequate lifestyle despite the passing of their parents.
Ottawa lawyer, Ken Pope, specializes in estate and other planning for people in this situation. He recently published an article that points out a frailty in the RDSP sytem. There is no clear way to recover the funds deposited if the child dies before the parents. You can see more here.
Caring financially for a disabled child is a complex field of study. There are many approaches and not all are compatible. A skilled professional practitioner can provide an efficient approach and that efficiency means you child lives a little better or maybe you can get the answer for a smaller capital input. Do not overlook second-to-die life insurance.
This kind of planning is not a do-it-yourself project, it has to work.
Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.