Advisors say parents are better off using their own retirement assets to live on. They can then take out life insurance policies on themselves to fund the trust for their special-needs child after they are gone.
Collin Gimlin, financial advisor at Prime Capital Investment Advisors, says life insurance policies make sense since money in a trust should be liquid. For younger parents trying to balance saving for retirement and supporting their child, term life insurance may be a cheaper option than whole life.
Some parents of special-needs children with other kids may be tempted to leave all their assets to that child’s support; financial advisors say that usually isn’t necessary. Gimlin suggests that parents could consider leaving property or less-liquid assets to siblings of the disabled child.
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