When H. Mark Friese’s son, Christopher, was very young, his doctors said the boy wasn’t meeting his cognitive development benchmarks for attentiveness and interaction. When Christopher was age 1 and a half, the doctors diagnosed autism.

Mark Friese, of the Washington, D.C.-based Menick-Friese Group of Merrill Lynch, said the diagnosis changed his life. “We went through planning and realized there were things we didn’t know about,” says Friese, whose son is now 19. “There were fewer resources available at the time, and we struggled. It’s expensive to bring up a special needs child.

“I remember one year we spent over $100,000 on therapy for my son. The worst thing you can feel as a parent is not being able to take care of your child financially.”

Nearly 21 million U.S. families are raising children with disabilities, according to the U.S. Census Bureau. The subject of special needs planning also hits close to home for Mike Walther, president of Deerfield, Ill.-based Oak Wealth Advisors. Walther has a sibling with developmental issues, and he recalls the struggles his parents faced.

“These families have greater medical expenses and cost burdens to bear,” Walther says. “That’s why it is critical to know how to access government benefits and to guarantee [that] benefits don’t go away due to poor planning.”

Cynthia Haddad is another special needs planner who knows the struggles families face personally. She grew up with a developmentally disabled brother, Ron, and is supervising his care as an adult. 

“When I started, I talked to planning firms to say that this was the market I wanted to serve, and I was told that they didn’t know anyone with a disabled child,” says Haddad, who is now co-director of special needs planning at Winchester, Mass.-based Shepherd Financial Partners. “Fast-forward 20 years and it’s completely different.”

John Nadworny, Haddad’s counterpart at Shepherd Financial, says the increased awareness of the challenges of raising disabled children has generated demand for planning. According to Nadworny, people used to naively assume that these children would somehow be taken care of as adults. “Now people are more aware of what they have to do, and they’re reacting.”

Children with special needs may need behavioral, psychological or physical therapy, special schooling and expensive levels of care. As they grow, the costs can escalate, even after their parents die.

“If [the parents] don’t plan, the child still has Social Security,” Friese says. “That helps. They’ll receive monthly benefits. But the child can’t have more than $2,000 in their name or it interrupts their benefits.”

If the disabled person has more than that amount in assets (according to a five-year look-back period), he or she loses eligibility for medical and financial benefits from Medicaid and the Supplemental Security Income program. Even affluent families need to plan so their wealth doesn’t disqualify their children. Health care expenses alone can balloon far beyond what they are prepared for, and programs like Medicaid help close funding gaps.

Medicaid is key to accessing education, adult day care, home health and other services. While wealthy families can pay out of pocket for assistance or equipment (avoiding the wait lists), some Medicaid programs don’t accept out-of-pocket payments. 

“If I serve a family with no money, I have the same conversation that I have with people with significant wealth,” says Stuart Flaum, managing director of New York-based Special Needs Family Planning. “The concern is what you can and cannot do in order to benefit from the social service system. It’s the same for high-net-worth families as it is the client with no money.”

Flaum became involved in special-needs planning when his adopted son received a diagnosis of an autism spectrum disorder. Advisors must carefully ask questions about a special needs child’s longevity and quality of life: Will the child have a shorter life span? Will the child be susceptible to chronic or terminal illnesses? Will he or she be capable of living independently or working?

“Before you ask questions, listen and let them share their story,” says Maedi Tanham Carney, founder of Washington, D.C.-based M&L Special Needs Planning. “Let them unload on you and tell you where they’re at. Then ask the basic planning questions.”

Tanham Carney became immersed in special needs planning when her daughter, Ellie, was born with oral-facial-digital syndrome and intellectual disabilities. The first questions should be simple, says Andrew Vasquez, a planner with MetLife Premier Client Group of the Pacific.

“I give them my background and then I ask them if there is anybody in their family that has a diagnosis I should be aware of,” Vasquez says. “Families appreciate the way I put that. I’ve encountered households that have received advice for a long time, but the diagnosis wasn’t discovered until I asked.”

When his son was born in 2002 with CHARGE syndrome, a cluster of congenital problems caused by a genetic disorder, Vasquez became more involved in special needs planning. If you know a client has a special needs child, start them talking about the child, says Robert Johnston, a Milwaukee-based financial advisor with the Principal Financial Group. Johnston, who was struck by a car about 40 years ago and has had his leg rebuilt, had his own special needs to worry about when, in 2005, his 2-year-old son was found to have autism.

“It’s important to help families feel in control of their destiny,” Johnston says. “I like them to understand that I’ve been in their shoes and that, as a special needs parent, I live a similar reality. Hopefully our similarities serve as a foundation for a trusting relationship.”

A family’s first priority is to care for their special needs relative, so conversations about money can seem like distractions. “It’s estate planning in its highest form, placing a huge responsibility on advisors’ shoulders,” Flaum says. “Skilled, knowledgeable advisors call me with problems that they couldn’t have anticipated. You have to know so much to serve this group: Social Security, Medicare, Medicaid, food stamps, the ABLE Act and cultural differences.”

The bottom line is easy to calculate—subtract the child’s lifetime state and federal benefits from the estimated cost of his or her needs over a lifetime. The difference becomes the family’s savings target for the child.

“You have to add the cost of care into your plan,” Friese says. “Stage one is when [the family is] working and trying to raise the child. The second stage is when the family goes into retirement mode. The third is when the parents are no longer around. You’re determining whether there will be money left over for the child after analyzing the family’s needs.”

Once special needs children turn 18, they are adults with the right to make their own medical and financial decisions. But they may require a legal guardian to manage their needs. When they turn 21, many government and educational benefits end. In some states, 21 is also the age of majority—when parents will need to become the children’s guardians to continue managing care.

As the child ages, the parents age, too, but caring for a disabled family member saps finances. Parents may borrow against retirement plans or may not save at all. That means they need a financial plan involving continued care for their child, says Friese.