What’s So Special about Special-Needs Planning?

Families need guidance to plan for when they’ll no longer be there to care for a child or other relative with a disability.

By Mary Anne Ehlert

Advisors tell me quite often they started their careers in the financial industry to make a difference in people’s lives. But a very small percentage of those advisors know that they can and should provide particular guidance to clients who have a family member with disabilities.

Over 20% of the U.S. population has a disability. If we ask the right questions, we will find many of our clients have a family member who falls into this category. If advisors don’t broach the topic, they might be missing a critical opportunity to connect with clients on what really matters to them. From a business perspective, not addressing special-needs planning might leave a practice liable for negligence.

I recommend advisors at least ask one simple question: “If we look up, down and around, is there anyone in your family who needs your financial and emotional support?” This question will at least open the door for the client to share their story about someone they are responsible for.

You might be surprised by what you hear. And don’t just ask the question once. I ask it once a year, because things change. Imagine your life changing on a dime because a spouse develops a cognitive impairment, a child is diagnosed with autism, a grandchild is born with a disability, or an adult child comes home from college with mental health issues. These are just a few of the possible scenarios.

If you are talking to a special-needs family about rates of return on their portfolio, they are not listening. They are so wrapped up in the day-to-day management of a family member’s illness or disability that there’s often room for little else.

Build confidence by listening

As financial professionals, we need to help them not only think about the future, but plan for it as well.

Families may have a million questions about their family member’s healthcare, education, residence, and employment when they reach adulthood. Will there be enough money to provide for the whole family now? How does one qualify for government benefits? Evaluate the right school systems? Find the right residential program? Create an appropriate financial plan? Structure an estate plan? Find the right team to support everything that needs to be accomplished?

I saw firsthand the difficulties my parents had in making sure my sister, Marcia, who had cerebral palsy, would be cared for when they could no longer do so. I had the advantage of growing up caring for a sister, planning for a son with a disability, and later planning for both my parents who developed care needs as they aged. And I have learned over 30-plus years in the industry that listening to a client’s fears is the very first step.

Since 1990, when I founded my firm, I’ve developed an eight-step process for future care planning that addresses all aspects of life, including legal considerations, potential government benefits, transition planning, residential options, employment opportunities, recreational choices, investment solutions and family communication. At every step, we focus on the family member’s abilities, not their disabilities.

Eight essential steps

Even if you don’t become an expert in special-needs planning, doing nothing is not an option. Familiarize yourself with the steps families need to take:

Make the family feel comfortable with telling their story

Many families are, at least in the beginning, hesitant to share their stories. It’s important for the financial professional to ask the right questions: Do you have a special-needs child, or a child who will need more financial support than their siblings in the future? What is the child’s disability? What are their unique gifts and talents? What are your dreams for their future, and what are your fears?

Identify the potential life needs of the special-needs individual

Just like the disabilities themselves, life needs can vary widely. They can range from residential care to community support, or even a life of independent living and employment for those with mild disabilities. This step helps families quantify medical expense deductions, identify tax returns to be filed and clarify other expenses not yet accounted for.

Discuss legal implications

We’re not attorneys, so we’re won’t provide legal advice. We will, however, ask whether there are wills, powers-of-attorney, trusts and guardianships. The family may say, “Yes, we have wills,” but the wills may not be adequate for this family. You can’t determine that, but you can advise them to work with an attorney who is knowledgeable in estate planning for special-needs families. I’ve found that families want to delay this step because the decisions are overwhelming. Help them get to the right attorney.

Outline the benefits the special-needs individual may be eligible for

You have a role to play in ensuring the individual maintains their eligibility for such programs as Supplemental Security Income, Social Security Disability, Medicare and Medicaid. Often, clients proudly tell us that they’re setting money aside in their family member’s name, sometimes by working two jobs. Unfortunately, those assets will disqualify their family member for government benefits. Rather, acquaint clients with Special Needs Trusts and ABLE accounts.

Document everything

We help parents come to the realization that their family member’s care is eventually going to be someone else’s responsibility, but that one person shouldn’t take on the entire job, which could last decades, disrupting their jobs and even their retirement. So it’s important to map out a team, including “money people” and “care people,” and to put this plan in a visual format to help the family see it clearly. If a sibling or other family member has agreed to be in charge, bring them into the discussion but don’t leave them with all the work.

Help plan for when a special-needs individual needs more support or ages out of state-supported education

What will happen when your client’s child (perhaps by then an adult) must have a place to live, work and play? You may not be an expert in these types of programs, but you can help a family by providing a network of professionals who can help them.

Fund the future

As financial professionals, we can help a client make wise decisions today that will be beneficial in the future. For example, if the plan dictates that a certain amount of money is needed for the lifetime of the individual, will the government provide all the necessary funding? Can the family adequately fund the special needs trust? Should life insurance be purchased, and who should be the policy owner?

Review and revise as needed

New legislation may be enacted that impacts a family’s plans, a new program may be created, or one may be discontinued. Families require regular reviews to understand any changes that may occur, both within their own circumstances and the wider environment.

Don’t wait. Take step one

If you give your client only one piece of advice, make it this: Don’t wait until the situation is urgent. That’s the toughest time to plan. Listen well and get them to the right professionals. Be there to provide the best client service of all: hope.

Mary Anne Ehlert, CFP, specializes in financial planning for families with a disabled family member. She is the founder of Protected Tomorrows in Lincolnshire, Illinois. She is looking for advisors who wish to build a practice in this area, so please get in touch. For more information, contact Mary Anne at 847-522-8086.


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