(MONEY Magazine) – It's 8 p.m., and in the spacious three-bedroom home of Kevin and Cheryl Clarke in Edmonds, Wash., 15 miles north of Seattle, six-year-old Jeffrey is getting ready to go to bed. For Jeffrey, this means more than splashing his hands and face and brushing his teeth. Every night, he and his parents must endure an elaborate, sometimes uncomfortable 45-minute ritual. The reason: Jeffrey was born with branchio-oto-renal syndrome, a rare hereditary disease that left his hearing impaired and his kidneys next to useless. The routine begins with a weigh-in. Kevin, 37, the owner of a real estate consulting firm, puts his 40-pound son on a scale that registers his weight to the tenth of a kilogram. Then, while the boy removes the hearing aids that his condition requires and settles down in the room he shares with his older brother Christopher, 12 (sister Amanda, 9, is down the hall), Kevin scrubs his hands for five minutes with an antibacterial soap, pulls on surgical gloves and a mask, and rejoins Jeffrey, putting a mask on him as well. Next, the critical step, which Jeffrey now tolerates without complaint: Kevin takes a disposable quarter-inch-diameter plastic tube that is attached to a five-foot-high dialysis machine at Jeffrey's bedside and connects it to a second tube implanted in the child's abdomen by doctors. Kevin secures the connection with a sterile pad and surgical tape. Then he flips on the machine, and it begins to gurgle softly, filtering impurities out of Jeffrey's bodily fluids. Meanwhile, Cheryl, 37, a former bank teller who has been at home full time since Christopher was born, mixes Jeffrey's nightly vitamin and mineral supplements, and if he has not eaten at least 1,400 calories during the day (Cheryl keeps count), she hooks him up to a feeding pump through another tube that sticks out of his left side. Twice a week at this time, Jeffrey is given the anti-anemia drug EPO by injection -- a procedure he is persuaded to tolerate by being allowed to pick a small prize, such as a baseball card, from a goldfish bowl his parents bring out for the occasion. And every night, as the ritual begins, Jeffrey says his prayers. On this night, he says: ''Father in heaven, thank you for my family and Cheers ((the Clarkes' cocker spaniel)). I hope one day I can get a new kidney so I don't have to be on a machine.'' Most of the nation's 120,000 dialysis patients -- 1,800 of them children under age 20 -- don't undergo such an arduous nightly routine. Instead, they visit a hospital three times a week for a $20,000-to-$30,000-a-year procedure known as hemodialysis. But the Clarkes chose the equally expensive alternative peritoneal dialysis for Jeffrey because it can be administered at home. A successful transplant would eliminate the nightly ordeal, and among the five major operations Jeffrey has undergone in his six years have been two kidney transplants, the first with an organ donated by Cheryl herself. But the boy's immune system rejected both kidneys, so for now, as they have since Jeffrey was born, the Clarkes do whatever they can to give their son and the entire family as normal a home life as possible. Parents of most of the United States' roughly 1 million children with serious chronic illnesses strive for similar goals -- and face similarly formidable obstacles. In addition to the day-to-day practical difficulties, there are inevitable emotional strains. ''In many families,'' says Paul Newacheck, an associate professor of health policy at the University of California at San Francisco, ''the stress proves unbearable. It can lead to separation or divorce, or at the least a parent giving up a job or a promotion to reserve time for the child.'' Moreover, the financial burden can be crippling. Even for the majority of Americans who have private insurance, coverage is usually subject to lifetime maximums that can be reached rapidly, leaving families with chronically ill children to face daunting sums year after year. The Clarkes have been comparatively lucky financially. While Jeffrey's medical bills since birth have totaled more than $550,000, the family's out- of-pocket cost has been less than 2% of that. Private insurance has paid about $300,000. But since October 1989 -- a year after Jeffrey's first transplant -- his dialysis- and transplant-related bills have been largely covered by Medicare. Jeffrey is among some 76,000 kidney patients under age 65 who benefit from a unique rider to the legislation that controls the federal government's health insurance program for the elderly: 80% of the costs of kidney transplants and dialysis are covered regardless of age or income. The family's private carrier, King County Medical Blue Shield, picks up most of the remaining expenses for his treatment after the Clarkes pay a $200-per- person annual deductible. Still, the family faces other short- and long-term financial consequences of their son's condition. They've been able to manage so far, thanks largely to Kevin's income from his 10-employee business: $60,000 in salary and roughly $15,000 to $20,000 in bonuses in each of the past five years (less 10% that the Clarkes, as devout Mormons, tithe to the church). But expenses keep mounting. Incidental out-of-pocket costs for over-the-counter medicines, transportation to and from the hospital and meals in its cafeteria totaled about $2,000 last year. Every year there's a big-ticket item or two that insurance won't cover, such as the $1,100 hearing aids Jeffrey needed in 1989. And then there are the family's insurance premiums -- which reached $7,392 in 1990 because of Jeffrey's illness -- and the matter of home nursing help. Cheryl desperately needs relief from her 16-hour-a-day double duty as mother and nurse, but neither Blue Shield nor Medicare pays for home care, and the Clarkes feel they can't afford the $150-a-day cost on their own. The family's assets and savings are, happily, solid. Their house, bought in 1984 for $123,000, is now worth about $235,000. They've got $60,248 in a $ Schwab money-market fund Individual Retirement Account, and their liquid savings total about $71,000 in a bank money-market account and certificates of deposit. But they have yet to tend to some of the basics of their financial life, such as developing a systematic retirement savings strategy and devising a plan to provide for Jeffrey's long-term future while still being fair to Christopher and Amanda. For most of the past six years, the Clarkes have focused on dealing with Jeffrey's condition and minimizing its disruptive effect on family life. Kevin and Cheryl reserve Sunday for church and ''family day,'' and they have taken pains to enlist help from relatives, friends, neighbors and church members in looking after the older kids when Cheryl has had to stay in the hospital with Jeffrey. But sometimes this doesn't seem quite enough. ''With Christopher it's hard to know what he's feeling,'' says Cheryl. ''He keeps it inside. Amanda is very vocal. When she feels Jeffrey's getting all the attention, she'll say so and we can correct it.'' As for raising Jeffrey, the Clarkes have largely followed the advice of Dr. Robert Hickman, a pediatric nephrologist who has become a family friend. ''When Jeffrey was born,'' says Cheryl, ''Dr. Hickman told us that if we treated him like a normal child, he'd be a normal child.'' In many ways, he is just that. A popular, outgoing youngster, he has a spirit that makes up for his slight speech impediment, his hearing loss and the fact that at three- feet, four-inches, he is four to five inches shorter than most of his peers. (The absence of functioning kidneys hampers growth.) He swims, bicycles and last spring and summer played second base for the Pacific League Sluggers in a local T-ball league. Before games, Kevin would wrap an elastic bandage around Jeffrey's middle to shield his abdominal tubes. ''If he needs to slide headfirst into second to be safe, he'll do it,'' says Kevin proudly. ''He's that kind of kid.'' Of course, no bandage will be necessary for T-ball if a donor kidney can be found that Jeffrey can live with. His doctors at Seattle's Children's Hospital and Medical Center thought they had one last summer, two days after the family returned from a much-postponed nine-day vacation on Maui. The Clarkes had been waiting for a donor for nearly two years -- ever since Jeffrey's body had rejected Cheryl's transplanted kidney. Doctors had held off on that transplant until Jeffrey had grown to a size -- 22 pounds -- that would make the operation safe. That took four years. But when the time came, the odds of success seemed good: a 90% chance that his mother's kidney would work for him for at least a year and a 50% chance that it would last as long as 10 years. Within three days, however, doctors detected signs that he was rejecting the organ. Ten hours of surgery to save the kidney failed, and on the 10th day it was removed. Jeffrey's name was then added to the nearly 300 transplant candidates already on the state's kidney waiting list. Kevin and Cheryl wore pagers to be sure they wouldn't miss the call if a kidney became available. The pagers had gone off only twice: once on Christmas Eve with a wrong number and once when the batteries got low. Last August, there was no mistake. The tissue of a kidney removed from an anonymous donor was a close match to Jeffrey's. Although the odds were less favorable than with Cheryl -- a 50% chance that the transplant would last five years -- the Clarkes were guardedly optimistic. Five days after the operation, however, Jeffrey's temperature shot up to 104 degrees -- a probable sign of acute rejection. It remained high for four weeks as doctors struggled to save the transplanted organ. They could not. In mid-October the kidney was removed. Recalls Cheryl: ''After the surgery, Jeffrey asked Kevin, 'Did they put in a new one?' And when his dad said no, Jeff turned to me and said, 'That's okay, Mom.' '' Even after the kidney was removed, Jeffrey didn't get well. The drugs he had been taking to keep him from rejecting the kidney had fostered complications. He had picked up a possibly life-threatening cytomegalovirus (CMV) as well as a fungus that had lodged in his heart. By the end of October, his body weight was 32, down 10 pounds from August, and the Clarkes and their doctors shared the unspoken fear that Jeffrey might die. ''It was really scary,'' says Cheryl. ''I kept wondering if we were right to put him through this. All the transplant did was make him feel worse.'' Family life, meanwhile, had been turned upside down. Cheryl stayed with Jeffrey in the hospital from 8 a.m. to 3 p.m., then picked up the other kids from school and spent evenings with them, preparing dinner and helping with their homework, while Kevin took over hospital duty. He often remained until 11:30 p.m. and even met occasionally with clients in the hospital cafeteria. In late November, Jeffrey began to improve. The CMV and the fungus were under control, so doctors allowed him to visit school to have his picture taken with the kindergarten class he hadn't yet met, and he was permitted a full day out of the hospital on Thanksgiving. But what he really wanted was to go home for good. On Dec. 16, some 3 1/2 months after the operation, he got his wish. Christopher and Amanda were almost as happy as their brother. ''I'm really, really glad he's home,'' said Amanda. Added Christopher: ''It was pretty boring without him.'' In the past few months, Jeffrey has regained the weight he lost, and thanks to growth hormones, he has shot up three-quarters of an inch. His class greeted him with applause when he rejoined them after Christmas. He has resumed swimming lessons and can't wait for this year's T- ball season to begin. Lately, as they put their son through his nightly dialysis regimen, Cheryl and Kevin have begun to focus on tough long-term issues. His life expectancy can only be guessed at because of the complications, ranging from infection to hypertension, that are frequently associated with dialysis. His prospects would improve if he were able to accept a transplanted kidney, but his doctors still haven't determined what caused the two rejections. The Clarkes aren't ready to risk a third until they know. ''We never wanted to think of Jeffrey as a chronically ill child,'' says Cheryl. ''We just thought he'd get the transplant and then be well. But until medical technology catches up, we'll wait and be happy with what we have.''

MONEY asked William Dussault, a Seattle attorney specializing in issues affecting the disabled, and Dorothy Lewis, a Tacoma certified financial planner, to advise the Clarkes. Their chief points: Disability planning. Dussault suggested that the couple create trusts for each of their children in case both Cheryl and Kevin die unexpectedly. For Chris and Amanda, he recommended testamentary trusts to be set up in the Clarkes' wills, providing for the transfer of assets into the trusts upon the parents' deaths. This would separate the older kids' shares of the family wealth from Jeffrey's so they wouldn't be liable for his medical bills. For Jeffrey, Dussault prescribed a ''special needs'' trust for people with long- term disabilities. Such trusts are designed to give eligible individuals access to aid from government programs such as Medicaid and Supplemental Security Income without their first having to exhaust all personal resources. Probable fee for setting up the trusts for all the children: $300 to $500. Dussault further advised the Clarkes to appoint a trustee -- usually a relative, a bank or both -- to manage the children's money until they reach their mid-twenties. Go for growth. Financial planner Lewis commended the Clarkes' savings habits. She suggested, however, that their money should be earning more. ''Particularly with your IRA money, you really belong in growth-oriented mutual funds,'' she said. She told them to roll over the $60,248 they had in their money-market IRA into another IRA, putting $20,000 in a growth and income mutual fund and $10,000 each in global, balanced, bond and growth funds. ''You're probably not going to touch that IRA until you're 59 1/2,'' she said, ''so it will have time to ride out the market's ups and downs.'' She then advised them to set up a $25,000 emergency savings cushion in a money- market fund like Vanguard's Money Market Reserves-Prime, which recently yielded an above-average 7.2%. The rest of their non-IRA money -- about $46,000 -- should be allocated as follows, she said: 50% in tax-free Washington State zero-coupon municipal bonds maturing in less than 15 years, and half in staggered CDs of six months, two and three years. Pursue government-supported home health care. Dussault estimated that the Clarkes were eligible for about 48 hours or $400 a month of state-sponsored in-home respite care -- relief that is provided by an alternate care giver. Cheryl said she had applied to the state's Division of Developmental Disabilities earlier and had been told Jeffrey didn't qualify because the Clarkes seem able to care for him themselves. Dussault, however, urged them to persevere. ''It's all appealable,'' he said. ''It's often a squeaky-wheel- gets-the-grease kind of a deal.''

All the Clarkes' financial decisions were put on hold while Jeffrey was hospitalized. Now they say they plan to revise their wills to set up the prescribed trusts. Kevin says he is reading up on mutual funds and plans to start investing in them soon.

BOX: THE ADVICE

The Problems: Providing for their children's futures, managing investments more profitably and securing home help for Cheryl

The Solutions: Set up individual trusts for the children, invest in mutual funds, and insist on financial help from government agencies.

BOX: Fortunate finances

Kevin's income has minimized the toll of Jeffrey's illness on family finances.

INCOME Kevin's salary and bonus $80,000 Tax refund 7,400 Interest and dividends 4,250 Other 3,000 Withdrawal from savings 3,000 TOTAL $98,250

OUTGO Taxes $34,456 Mortgage payments 10,200 Charitable giving 9,000 Health insurance/Medicare premiums 7,735 Savings/IRA contributions 7,350 Food and clothes 7,200 Vacation 5,500 Home maintenance and utilities 5,448 Miscellaneous 4,986 Unreimbursed medical expenses 4,215 Preschool tuition for Jeffrey 2,160 TOTAL $98,250

ASSETS House $235,000 Bank accounts 71,000 Cars and personal property 65,000 IRAs 60,248 Life insurance cash value 5,000 Debts receivable 2,500 TOTAL $438,748

LIABILITIES Mortgage $93,817 Home improvement loan 2,847 TOTAL $96,664 NET WORTH $342,084