Divorce Financial Planning, Special Needs Financial Planning

How Does Divorce Impact a Special Needs Family?

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Divorce, Divorce Attorney, Dividing Assets, Entrepreneur, Executive, Alimony, Child Support

Divorce is a scary endeavor filled with emotions, memories, and potentially a lot of fighting over how to split years worth of “stuff”. However, divorcing with a special needs child is an entirely different level of emotion, fear, and fighting. All children are impacted in one way or another from the nuclear family’s dissolution. While a non-disabled child might come to understand the “why” behind a divorce, some children with special needs have a harder time processing, accepting, and adapting to change. Inevitably, these children will need more support and a potentially longer transition period. In some cases, children with special needs may require additional support structures that go beyond the resources the immediate family can provide. Divorce can be an expensive seven letter word, but when applied to families with special needs children you might want to prepare for a longer road. Let’s explore three areas affecting divorcing families with special needs children.

Family Transitions

From the moment you said “I do” to the birth of your first child, you probably felt you would be able to handle anything life threw your way. When it comes to raising children, this adage is regularly put to the test. Parents often think that their new bundle of joy is exceptional in many ways. But for some parents, in some cases, they may find that their child is growing and developing differently than other children their age. Children born with developmental delays, physical or emotional impairments, or other learning disabilities may not understand the potential obstacles that lay ahead of them. Therefore it becomes the parent’s responsibility to determine which, if any, changes the family should make to protect the child. These changes can include, but are not limited to:

  • One parent may quit their full-time job to take care of their child.
  • The parents may seek additional support services to help the child adjust and adapt to their
  • The parents will consider how to employ community services for transportation or education
    and vocational help at school or work.

In the case of a divorce, it is important to understand these changes do not go away. In fact, these changes are potentially compounded. For example, the child may need additional “transition” support from therapists, care managers, advocates, and their close family network in order to understand how to process a divorce. This example highlights the need to completely understand the additional support services a child will need as the settlement agreement is being negotiated.

Financial Impact Of Divorce

When a couple decides to divorce, the decision to split assets becomes less about two people and more about the couple and their child(ren) with special needs. Consider these questions as your discuss dividing assets with your CERTIFIED DIVORCE FINANCIAL ANALYST® and divorce attorney:

  • What was the martial value in having one person stop their career to attend to their child(ren)’s daily needs? What would it cost to re-educate that spouse to enter the workforce?
  • Who will attend to the child(ren)’s needs if both parents have to work now? What additional support services will be needed and who will pay for them?
  • If your child will not be able to financially take care of themselves after 18 years of age, how long should alimony and child support obligations continue to be paid to take care of your mutual child?

These questions do not even begin to adequately assess or address the needs of you or your child. It is important to speak with professionals who are well versed in the financial impacts of divorce, and how divorce affects nuclear families with special needs children.

Life After Divorce

Divorcing couples need to evaluate and create a plan for their special needs child in the event that one person becomes incapacitated or dies. In other words, while married, if one spouse died prematurely the other spouse would naturally step in to attend to their child’s needs. This is not to say the same would not happen after a divorce but financial resources may be tighter which can lead to few options.

Before the divorce is finalized both parents should conduct their own financial planning to assess their financial situation alone AND in the event the other spouse suffered a premature death or disability. Only after this analysis is conducted can both people evaluate the financial impact of divorce as it pertains to their child(ren) with special needs.
For example, if either parent is under insured and either befalls a tragic event then alimony and child support could be at significant risk. Furthermore, if either parent loses the ability to provide for themselves and their dependent child then that child’s life after their parent’s death may be in jeopardy. This is why having appropriate life and disability insurance coverage will be critical to protecting the parents and the child(ren).

Another important consideration for both parents lends itself to asking “Where does my money go if I die prematurely?” If your plan is for your child(ren) to inherit the funds then you need to be very careful which the type of estate plan you establish. We encourage all clients going through a divorce to leave divorce attorney’s office and proceed directly to your estate planner’s office. Why? Well in some states, depending on intestacy laws, if you die on your way home from the court house and the beneficiaries for your assets have not been changed then your ex- spouse may inherit them.

Alternatively, in the event of a premature death your ex-spouse can become the guardian of the child(ren) which means without the correct estate documents the state could appoint your ex- spouse as the conservator of the child(ren)’s inheritance. This is not to say this is guaranteed but you want to ask your attorney what happens in the event of your death.

Lastly, estate planning for children with special needs is very important. Beyond the fact minors should not inherit assets outright, if an individual with special needs were to inherit money outright then that inheritance could disqualify them from receiving state funded benefits. This is where using an number of special needs trusts can protect your child(ren)s inheritance and typically prevent government benefits from being dropped.


Divorce is hard for everyone. While the parents are the primary parties to the divorce process, anyone with children knows the parents are not the only people who suffer. Unfortunately, when you layer in the complexities of Special Needs Planning the divorce process can become more complicated and ongoing support can take on an new dimension. In the end, it is critically important that both parents come together, for the benefit of their special needs child(ren), to assess the changes the individual(s) may go through and determine how to protect all parties involved.


Content in this material is for generation information only and not intended to provide specific advice or recommendations for any individual.

To be considered for the Certified Divorce Financial Analyst (CDFA®) designation, a professional must have at least two years’ experience in the financial or legal industry and must complete a series of four examinations based upon material learned from four self- study courses. Coursework outlines several key areas important in divorce proceedings, including the treatment of property during divorce, alimony and child support, and tax implications of property division. The entire program generally takes at least 4 months to complete.


About Jon Peyton

Jon is an accomplished Senior Executive, Entrepreneur, and thought-leader with demonstrated success across the financial services, publishing, and exit planning industries. He has worked with thousands of clients and managed hundreds of millions of dollars spanning 20 years for multiple firms.

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