Managing the costs of a child with special needs

Lauren is Holly and Andrew Koenig's "miracle girl." Born at 25 weeks, she weighed just 1½ pounds and was the surviving twin. Lauren suffered brain injury at birth. She has cerebral palsy and has endured multiple surgeries in her 14 years.

"Lauren has a lot of physical needs. She has problems with speech, balance, poor muscle tone, pain in her legs and ankles, and is prone to seizures," Holly Koenig says. Despite her limitations, mom and dad can brag about her good grades, and she participates in her school's teen volunteer group and excels in musical theater.

While parents of special-needs children like the Koenigs face emotional challenges, they also face a special set of financial challenges. With extraordinary medical expenses, many families drown in debt. Often one parent works and the other is the caretaker. Other children may suffer because the family budget is focused on the special-needs child, which can cause resentment.

And two huge questions haunt parents: "Who will care for my child when I go? Where will they live?" says Charlie Massimo, president of CJM Wealth Management in Deer Park, who advises special-needs families and is the father of triplets, two of whom are autistic.

This is "financial planning on steroids," says Richard Newman, a certified financial planner with Life Audit Professionals in Boca Raton, Florida. "The needs are greater. The consequences are dire for families that don't plan."

Start early

The Koenigs started making choices for Lauren early. They moved from Manhattan to Jericho soon after she was born to take advantage of the resources in Nassau County. The county provided a nutritionist, feeding expert and special-education coordinator, Holly Koenig says.

The couple targeted Jericho because of its school district. Lauren, a freshman in high school, has a 25-page Individual Education Plan. The school provides speech and occupational therapy and assistive technology so she can type rather than write. "I don't have to fight for anything" from the district, Holly Koenig says.

Hard to save

But the family's finances are still stretched thin. "I have borrowed thousands of dollars from family. I have pleaded with doctors that charge $600 a visit" to give me a break, says Holly Koenig, a vice president at a Manhattan firm. She and her husband, a newly minted attorney, have health insurance, but huge out-of-pocket expenses for health care and summer programs impact finances.

They have an adviser for long-term investing but mostly are on their own. The Koenigs plan to refinance their mortgage to ease monthly expenses.

"Everything goes to Lauren's livelihood. We don't go on trips. We have little savings for retirement," says Holly Koenig, who has asked charities and nonprofits for financial assistance.

For families with special-needs children, there is little room for financial mistakes.

How to keep from going into debt?

Cut costs. Families with no insurance can take advantage of free drug programs from drug manufacturers. And don't overlook benefits such as heating and cooling cost assistance.

Budget. Many families wing it, but special-needs families shouldn't. Create a budget and stick to it.

Build a team. "You need an attorney, financial adviser, a social worker that understands government plans, who can help you find resources. There is money for the unexpected, like caregiver respite," says Massimo, author of "Getting Off the Street -- Sane Investment Advice from One of the Nation's Leading Wealth Managers."

Tap community resources. Massimo points to Independent Support Services in Hauppauge as a good place for help; Easter Seals and the Autism Society also provide services. Network with other families.

Plan for the future. Talk to an estate planning attorney about setting up a special-needs trust. Look for ways to make extra income to shore up savings for retirement and college for the other children.

The challenges can be overwhelming. Massimo advises, "Never give up. Don't be shy about asking questions; this is for your child."