Planning for a family with down syndrome child

John and Susie came to Singapore to work from their home country a few years ago. Both earn a good income compared to what they were getting back at home, and for a few years life were comfortable. Both John and Susie are wonderful people and I am privileged to know them. Their lives took a turn when they have a child, Danny, with Down's Syndrome. Because of the medical care needs of their child, they are saddled with a debt of about a hundred over thousand. Call it poor planning, call it unlucky, call it whatever you want; when I visit them, I see pure love and patience for the child. One evening I was in their living room discussing some planning stuff, the child just vomited on the floor after a meal and the mother just patiently clean him up and cuddled him, all the while with a smile on her face. And though they are apologetic towards me for interrupting the discussion, they're not embarrassed or anything. Somehow this small episode shook me quietly.

With this great love for their child, they are clearing their debt happily and with every penny they can scrape together. They have gone through credit counselling and has worked out a very Spartan budget. Very tight. It's going to take them seven years to pay back the full sum. Meanwhile they know that they need to plan if they were to pass away at any point, worse still, if they were to perish in a common disaster and leave their child behind.

According to research (http://www.cdadc.com/ds/downsyndromelifeexpectancy.htm), "Down Syndrome life expectancy for babies and infants, sees approximately 15% dieing before one year of age. Down Syndrome life expectancy for the next 35% will be death before 50 years of age. Down Syndrome life expectancy for the remaining 50% is more than 50 years of age." According to this reference, I calculated that they need to provide for at least 30 years of living expenses for their child. For most people, that calculated amount is a big number, even if they are not in debt to begin with. John and Susie agreed that they need to be insured just in case any mishap were to happen to them along the way and they haven't provided enough for Danny. So, lesson #1 I learnt in planning for parents in the situation of John and Susie: Always protect the parents first.


John and Susie tried to buy some medical insurance for Danny but they were declined by most insurers for the reason that Danny has Down's Syndrome. I tried for them as well but the underwriter took a look at Danny's medical reports and told me that it will be a clear "no" from the company. So Danny just went on without any medical insurance coverage, until one day I heard another financial planner mentioned that children with Down's Syndrome can sign up for AVIVA MyShield, but under moratorium underwriting. While if Danny applies for MyShield under full medical underwriting he would almost certainly be declined, application under moratorium underwriting at least promises a glint of hope. What moratorium underwriting says is that if Danny were to have any illness that is not pre-existing, it will be covered under MyShield and AVIVA will foot the medical bills. But if any medical treatment arises out of Down's Syndrome or is caused by it, then it will not be covered. That sounds good enough for John's family and is a vast improvement for Danny's previous situation of having no medical insurance cover at all.
So, lesson #2 is: Get medical insurance through AVIVA MyShield.


Now, John and Susie want to make sure that Danny receives the money that they intend to leave behind for him. In most cases, getting them to write a will might be sufficient. But we have to cater for the possibility that Danny cannot manage his own money well after he turns 18, the legal age to receive inheritance. Which means to say, if John leaves behind half a million worth of asset to Danny, this amount of money will be held by the guardian until Danny turns 18. After which the law will require the guardian to relinquish control of the money to Danny. Danny will be loaded with that much money, and it might attract all sorts of good and bad people who wants a cut (or all) or this money. False friends might appear, crooks might start to target him. All in all, it's a very precarious scenario. It's far better to design a way, while John and Susie are around, to ensure a few things:
(a) That a monthly income, instead of a lump sum, is being released to Danny for his living allowance. This amount should be adjusted according inflation so that the amount will still make sense in years to come.
(b) There should be a trustworthy guardian and trustee who resides in Singapore, since this is where Danny is likely to continue staying in, for the medical care standard here is better than John's homeland. It is important that the trustee who will hold Danny's inheritance is physically in Singapore, because they will need to have a local account and should be easily contactable if Danny were to suddenly need a sum of money for emergency or medical expenses. Which brings us to the next point,
(c) there should be a provision in the instruction that on top of the regular monthly expenses, Danny should be allowed to withdraw a lump sum to pay for any medical expenses, education related expenses and perhaps, go for a vacation once a year.
To do all the above, a simple will is not enough. John and Susie will need to set up a trust for Danny. There are many ways to do it, but the easiest is probably to set up a Testamentary Trust in their will. A testamentary trust can do all the above and more. The set up fee of such a trust range from a few hundred dollars to many thousands of dollars. Currently the costing is not fixed yet as I am still working with John and Susie on it.
So, lesson #3: It is necessary to set up a trust to provide for the child in a reliable and steady manner.


I am young and do not have my own kids yet, but from what I hear from other friends and associates, bringing up a child is a lot of chores and a lot of joy. And none would trade anything under the sun for that experience, though many would prefer not to go back to those days of having to wake up in the middle of the night to change diapers. However, to the parents of children with Down's Syndrome, this sweet burden comes with an additional helplessness, since there are only about 1 in 700 children with this condition. I pray that I can render good help to John, Susie and Danny, as we are all beloved children of God.