Special Needs Planning Insights
Breaking Barriers: Celebrating Women’s Vital Roles as Disability Advocates
During Women’s History Month, we celebrate the accomplishments of women and take this opportunity to reflect on their contributions to the betterment of society. Included amongst these women working to improve the lives of others are women who advocate and care for others, specifically individuals with special needs. Caring for a family member living with disabilities can lead to several challenges, and one of the key aspects these women caregivers must consider is how to secure benefits that protect the financial future of their adult children with disabilities.
Here are some important points for women to consider when applying for Social Security benefits:
Understanding and Qualifying for the Benefits
Benefits require individuals to meet specific criteria. It’s important for women applying for these benefits to evaluate the criteria and consider whether their adult children with disabilities meet the requirements.
Application Process and Benefits
Understanding who to contact, the necessary documentation, and how to schedule an appointment are key aspects of ensuring adult children with disabilities receive the appropriate benefits.
Special Needs Planning Insights
Joellen Meckley on How to Support Women Caregivers
In the article, Meckley, who is the executive director of the American College Center for Special Needs, discusses how advisors can play a pivotal role in helping women overcome the financial challenges they may face when caring for children or adults with disabilities.
Meckley emphasizes the importance of understanding these women’s situations, listing several financial challenges they may face in their daily lives as caregivers. She goes on to enumerate strategies advisors can leverage to provide meaningful assistance to these women and how to tailor advice to their unique circumstances.
Read on to hear what Meckley has to say about this issue and what financial advisors can do to help!
Special Needs Planning Insights
Sophia Duffy Discusses Planning for Incapacity
In her recent article featured in Financial Advisor Magazine, Sophia Duffy, an assistant professor of business planning at The American College of Financial Services, discussed the effectiveness of tools such as revocable living trusts (RLTs) in planning as one ages.
Duffy compares the RLT to power of attorney (POA) and explains how RLTs can be even more effective than a durable POA.
Read on to learn more about this topic as Duffy enlightens readers to the usefulness of this tool!
Special Needs Financial Planning: Smart Advice For Families Coping With Disabilities
Incapacity Planning: The Hidden Power Of A Revocable Trust
4 Tips to Help Aging Parents Manage Their Finances
Special Needs Planning Insights
The College Hosts Inaugural Advanced Special Needs Planning Symposium
Over the course of the two-day conference, attendees from across the country got a more detailed look at how to plan for and best serve individuals with special needs and their caregivers with financial planning designed to ensure a successful and secure financial future.
A Deep Dive Into Specialized Knowledge
The symposium began with a welcome address from Joellen Meckley, executive director of the Center for Special Needs. Meckley thanked the around 50 financial professionals at the conference for attending and pointed out some notable facts: firstly, that the symposium was the largest in-person event ever held on The College’s campus; and secondly, that the Center for Special Needs had received a grant from the Christopher Reeve Foundation. Reeve, an actor who famously portrayed Superman in multiple movies, was himself severely disabled after a catastrophic horseback riding injury and was a well-known activist for those with special needs.
Meckley noted that the grant would go toward expanding the operations of the Center for Special Needs. She mentioned that grant funds would be used to support a project currently in development: a five-part video series on financial wellness for advisors, caregivers and clients who are facing paralysis, including modules on budgeting for disability, public benefits, and taking control of your financial future.
“Many people are drawn to this form of practice because they have family members or loved ones with special needs,” she said, noting that nearly everyone in attendance raised their hand when asked if they knew or were close to someone with special needs. “Most conferences like this are for lawyers – but this one is for you.”
Morning sessions were led by staple College thought leaders laying out many different specialized areas of financial planning that affect those with special needs. Tom Brinker, JD, LLM, PFS/CPA, AEP®, ChFC®, an adjunct professor of special needs planning, used his expertise in both tax planning and as a parent to a child with special needs to present a compelling lesson on tax strategies involving changing IRS regulations and tests for tax exemptions on housing, education, activities, and more – all while dropping some important and eye-opening facts.
“One in six children today has some kind of disability,” he said. “Rates of autism have risen dramatically across the country over the last decade – but is it really because more people are autistic, or just that we’re finally recognizing this condition for what it is? Either way, the need is growing and we need financial professionals who are educated to address it.”
College faculty members and staff including Lesley Mehalick, JD, LLM, an adjunct professor of taxation and special needs planning, Lindsey Lewis, CFP®, ChFC®, director and chair of the American College Center for Women in Financial Services, and other experts in the fieldshared their own insights on how special needs affect their distinct focus areas and constituencies, including the fact that most caregivers for those with special needs are women to Medicare and Medicaid, public benefits, Social Security, and more.
Impacts on Individuals and Caregivers
Some of the most impactful sessions of the first day of the symposium addressed the real-world implications of having to care for a person with special needs. In their workshop on ABLE accounts, meant to give adults with disabilities more financial and life independence, Kelly Piacenti of MassMutual and Jerry Hulick of Caring Consulting Group talked about the need for more awareness.
“We are the largest minority population in the country, and the business case for this space is huge,” said Piacenti, a key organizer of the event and leader of the Center for Special Needs Advisory Board. “We need allies, and advisors who say they don’t have any clients for whom this knowledge is relevant probably do and just don’t know it. Disability can happen anytime, and benefits available for those with special needs constantly shift. We need advisors who ask the right questions and can keep up with all the changes.”
In his session, Pat Bergmaier, CFP®, ChSNC®, discussed the very real possibility of caregivers needing to plan for a “retirement for three” – for them and their child with special needs, who may not be able to live on their own.
“Many parents don’t know how to face the fact that their children may need care even after they are gone and will need a way to maintain their quality of life,” he said. “Sometimes, they’re faced with the awful thought that it might even be better if their child were to pass away before them. But it doesn’t have to be this way. After the age of 18, things really open up for young people with special needs and their caregivers when it comes to benefits available: do the work and make a plan.”
Jason Fishkind, CEO of Hope Trust, also mentioned the need for sensitivity in working with caregivers and those with special needs, as well as the knowledge gap among financial professionals.
“Even though two in seven households are supporting someone with disabilities, very rarely is there a financial advisor with a broad understanding of the various issues confronting them,” he said. “You need to be an expert on this subject and know how to talk to them. The products and planning involved are so complex that it’s not something just anyone can do.”
An Emotional Call to Action
After departing for the evening, the symposium attendees reconvened the following morning, when they were welcomed back by George Nichols III, CAP®, President and CEO of The College. Nichols spoke about his own past experiences in the special needs space as the State of Kentucky’s mental health commissioner, as well as his own father’s struggles with dementia.
“The physical and emotional toll of caring for those with special needs or mental health issues is overwhelming,” he said, speaking of the challenges caregivers and families face. “Special needs planning isn’t just about kids anymore, either – many more adults are also being diagnosed with disabilities. The College is dedicated to building a powerful network of allies and thought leaders to meet this need.”
In a panel discussion, several experts in financial planning encouraged attendees to refer to special needs planning instead as “quality of life planning,” as much of their work is about ensuring individuals with special needs have the best lives they can possibly have. They also pointed out the importance of local efforts and building community in planning, as well as the value to financial advisors and firms to specialize in the field. With so few advisors experienced in this type of planning, they pointed out, you can easily corner the market in your given area – and once you help one family, others in their network will come flocking to you.
In another session, lawyer Ethan Ordog spoke about an often-forgotten aspect of special needs planning: making arrangements for elderly family members or clients who may not have the mental capacity to make their own decisions anymore and ensuring they are not exploited.
“Advisors are more and more being found at fault for elder exploitation because courts and juries find they should have known it was going on, but failed to act,” he said. “There are major differences between power of attorney, conservatorship, and guardianship – don’t trust your clients to figure them out. Laws, life, and needs are constantly changing, and it’s our responsibility to stay up-to-date on all of it.”
Mental health professionals from outside the financial services space were also heard at the symposium. Abby Grasso of PLAN PA, a special needs organization in Pennsylvania, spoke to attendees about the importance of approaching those with special needs and their caregivers with understanding and respect.
“Sympathy and empathy are not the same thing,” she said. “One in five US adults experience mental illness, and 17% of youth experience mental health challenges. When you talk to them, don’t try to change the subject or offer silver linings. Just let people know that you are there for them and that you understand what they must be feeling.”
The symposium ended on a high note, with many financial professionals present taking home significant lessons to apply in their practices.
“The information has been outstanding, and so much more than I anticipated,” said Robert DiLaura, a senior financial planning manager at Charles Schwab. “The ability to network with people who are like-minded and also working in related fields that we need to know about has been extremely valuable.”
“What I learned in the very first session probably paid for my coming by itself, and there’s been even more than that,” said Julie Smith, a financial advisor with Ameriprise. “It’s been wonderful to get different points of view and learn from others. I’ve gotten just as much from my peers as I did from any of the presenters, who were excellent.”
The event also honored the efforts of those present in the special needs planning space, including recognizing and celebrating Jerry Hulick’s 50-year anniversary as a member of the MassMutual family.
Special Needs Planning Insights
A Guide to Government Benefits for Families With Special Needs
For example, the advocacy organization Autism Speaks estimates the lifetime cost of caring for a person with autism at $1.4 million. That cost can almost double if the person is impacted by an intellectual disability (having an IQ under 70).
Most families don’t have the income or personal savings to meet these challenges. That’s why it’s essential to take advantage of all the government benefits that are available to assist families caring for a loved one with special needs.
If you are caring for a family member with special needs, make sure your financial planning includes these government programs.
Supplemental Security Income Benefits
Supplemental Security Income (SSI) is a federally funded program administered by the Social Security Administration (SSA).
Blind or disabled children and adults are eligible for SSI benefits, as are adults 65 and older who meet the program’s financial criteria.
The SSI definition of “disabled” is different for children and adults.
For children:
- The child must have a physical or mental condition(s) that very seriously limits his or her activities, and
- The condition(s) must have lasted, or be expected to last, at least one year or result in death.
For adults:
- The adult has physical or mental condition(s) that results in the inability to do any substantial gainful activity and can be expected to result in death, or
- The condition has lasted, or can be expected to last, for a continuous period of 12 months or more.
Visit the SSI homepage for information on the program and on how to apply. Also, know that the Social Security Administration will:
- Help you complete your application.
- Make an appointment and pay for a medical exam if the information you currently have isn’t sufficient.
- In some cases, pay for your travel to the exam.
Social Security Disability Insurance
Social Security Disability Insurance (SSDI) is an earned benefit funded by the Social Security tax fund and targeted to people whose physical or mental impairments prevent them from engaging in their normal occupation or other work. That means, even if an individual meets the SSI definition of disabled, that person must have sufficient Social Security work experience to qualify for payments.
The program includes the Disabled Adult Child (DAC) provision, under which an adult disabled before age 22 may be eligible for child benefits if a parent is deceased or starts receiving retirement or disability benefits. This is called a “child’s benefit” because it is based on the parent’s Social Security earnings.
The SSA website provides this example of a DAC benefit:
A worker starts collecting Social Security retirement benefits at age 62. He has a 38-year-old son who has had cerebral palsy since birth. The son will start collecting a disabled "child's" benefit on his father's Social Security record.
In this case, the adult child is eligible even though he has not worked or contributed to Social Security. Adult children who work can still receive benefits as long as their earnings remain below a level the SSA considers “substantial,” which in 2020 was set at anything over $1,260 a month.
Check out the SSA guidelines to learn more about SSDI benefits, eligibility, and application process.
Get professional support
The SSI and SSDI benefits are just some of what’s available from the government to assist families with special needs. Medicare and Medicaid include provisions that can provide additional financial assistance.
Even though the SSA website is easy to navigate, these benefits can be complex and challenging to understand. One of the best ways to ensure your loved one receives all their eligible benefits is to work with an advisor who has professional credentials and experience working in special needs planning.
This content and information was created by a third party and not The College. The College assumes no legal liability for the accuracy, completeness, or usefulness of any such content and information and the views expressed therein do not necessarily represent the views of The College.
Special Needs Planning Insights
Financial Planning for a Loved One with Special Needs
One of the things I learned from these families was that having a child or grandchild with special needs often comes with many challenges. Someone always needs to be available to care for them. Family vacations are infrequent. Trips to the grocery store are difficult. Going to a crowded movie theater on a Friday night isn’t ideal. And taking some “me time” is almost always an afterthought.
And then there’s the reality that the child may not ever be able to live a fully independent life away from home. This means that those responsible for the child’s care need to put into action a plan for now, a plan for when they can no longer care for the child, and a plan for when they are no longer here with them. If you are a grandparent of a special needs child, you may wish to share this article with the child’s parents.
The Importance of Estate Planning for Families with Special Needs Children
Estate planning is usually not the most comfortable area of financial planning to address for many clients. You may be thinking of the complexity, the cost, the time commitment, and the emotions that come along with this planning. If you are someone who needs to plan for a child with special needs, these thoughts and feelings are even stronger, but the need to plan is even greater. The focus for you will be to establish the necessary documents to act on behalf of your child and ensure that they can live a full, quality life when you are no longer able to help them.
You will also want to be certain that everything is in place if you become disabled. You will need to create what is called a Life Plan.
A Life Plan helps to ensure the right people are in place to care for your child and that they have everything they need to follow your directions. It also gives you a way to efficiently leave assets to your child, while considering the need for government benefits if they cannot work to meet the “substantial gainful activity” level, as defined by the Social Security Administration. In the Life Plan you will outline the present and future personal, legal, and financial needs.
To help you get started, below is a list of categories derived from the book Planning for the Future: Give your Child with a Disability the Gift of a Safe and Happy Life (Russell & Grant, 2010). For each of the categories we recommend listing four priorities on which you’d like to focus. These will be your stepping-stones to help you prepare a Letter of Intent when you meet with your CERTIFIED FINANCIAL PLANNER™ and your Special Needs Attorney to formalize your Life Plan.
- Residential: If you die or go into a nursing home, where do you want your child to live?
- Education: What is your long-term perspective of your child’s capabilities?
- Employment: What has your child enjoyed? List their goals, aspirations, limitations, etc.
- Social/Recreational: What activities make life meaningful for your child? List sports, hobbies, etc.
- Religion: Is there a special church, synagogue, or other holy place for fellowship?
- Medical Care: What has worked and what has not?
- Behavioral Management: Does your child have special behavior problems? What behavior management techniques have been effective in the past?
- Advocate/Guardian: Who will look after your child, advocate for your child, and be a friend?
- Trustees: Who do you trust to manage your child’s funds?
- Other Areas of Concern: What other aspects of your child’s life are important to note?
To learn how Modera can help you develop a comprehensive Life Plan, please reach out to your team of advisors or Contact Us at advice@moderawealth.com.
Modera Wealth Management., LLC is an SEC registered investment adviser with places of business in Massachusetts, New Jersey, Georgia, North Carolina and Florida. SEC registration does not imply any level of skill or training. Modera may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements.
For additional information about Modera, including its registration status, fees and services and/or a copy of our Form ADV Disclosure Brochure, please contact us or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov). A full description of the firm’s business operations and service offerings is contained in our Disclosure Brochure which appears as Part 2A of Form ADV. Please read the Disclosure Brochure carefully before you invest or send money.
This article is limited to the dissemination of general information about Modera’s investment advisory and financial planning services that is not suitable for everyone. Nothing herein should be interpreted or construed as investment advice nor as legal, tax or accounting advice nor as personalized financial planning, tax planning or wealth management advice. For legal, tax and accounting-related matters, we recommend you seek the advice of a qualified attorney or accountant. This article is not a substitute for personalized investment or financial planning from Modera. There is no guarantee that the views and opinions expressed herein will come to pass, and the information herein should not be considered a solicitation to engage in a particular investment or financial planning strategy. The statements and opinions expressed in this article are subject to change without notice based on changes in the law and other conditions.
This content and information was created by a third party and not The College. The College assumes no legal liability for the accuracy, completeness, or usefulness of any such content and information and the views expressed therein do not necessarily represent the views of The College.
Special Needs Planning Insights
Special Needs Trusts for Gifting and Inheritance
Often, family members or close friends want to help you by gifting to your child or leaving an inheritance to them. Though this generosity may be appreciated, there can be unintended side effects of gifting outright to someone who has special needs.
Outright gifts can affect your child’s eligibility for some government benefits if they are 18 or older. This is important to keep in mind because frequently an adult with special needs cannot earn enough income working to meet their own basic living expenses. Medicaid and Supplemental Security Income (SSI) are needs-based government programs designed to cover costs related to food, shelter, and medical care.
These benefits can be valuable by alleviating some of the financial burden that falls on you as the parent. In turn, they allow you to focus your own financial planning around supporting your child with supplemental expenses not covered by these benefits, saving for your retirement or your future long-term care costs, or providing for your other children.
Outright gifting also raises concerns about who will manage the assets that are given to the individual and how they will be protected from fraudulent attempts or creditor situations. There are planning strategies that can help with these areas. These strategies cover two categories: those gifts or inheritances that have already been completed, and future gifts and inheritances.
Completed Gifts and Inheritances
With completed gifts and inheritances, different considerations apply depending on whether your child is a minor or an adult. If you have a minor child who has received gifts or inheritances in their name, the money might be held in a Uniform Gift to Minors Act (UGMA) account or Uniform Transfer to Minors Act (UTMA) account. Any money deposited into a UTMA is an irrevocable gift, which means, even though you’re the parent, you cannot simply transfer the assets into your own account. Instead, the strategy to consider is using these accounts to cover expenses before your child reaches the age of majority. The idea is to allow them to benefit from this money now, while it is shielded from the Medicaid and SSI asset tests. In order to qualify or to continue to qualify for these government benefits when your child reaches age 18, they typically cannot own more than $2,000 in assets.
If your child received a larger windfall that will not be spent down in time, or if they are already close to adulthood, you may want to consider a “self-settled” special needs trust. This is a trust that is set up by a parent or grandparent where the child is the beneficiary. This trust is funded using your child’s own assets.
An attorney can help you decide which type of self-settled special needs trust is best. There will be specific language written into the trust document that limits the use of the trust to those expenses not covered by government benefits. If there are any remaining assets in the trust after the life of the beneficiary, the money will first pay back the expenses covered by Medicaid before being disbursed to the remainder beneficiaries.
Future Gifts and Inheritances
For those gifts or inheritances that have not yet been completed, you can plan in advance by establishing a “third party” special needs trust, where your child is the beneficiary. This trust is funded using assets that are not owned by your child. Like the self-settled trust described above, the attorney who is helping establish the third-party trust should include specific language limiting the use of the money to supplement, not replace, income provided by SSI or Medicaid. Unlike the self-settled trust, any money that remains in the trust will not be used to repay Medicaid. Other remainder beneficiaries are named to receive the leftover assets.
The assets in both trusts will be protected against creditors should an issue arise with your child in the future. There will also be a trustee named who will oversee the money. This function protects your child if they are unable to manage their own finances or if they are susceptible to fraudulent phone or email attempts to obtain money.
You will likely name yourself as the trustee so that you can manage the investments and make withdrawals to cover your child’s supplemental expenses. Keep in mind that any payments from the trust should be made for the benefit of your child only and should be paid directly to the service provider.
You will also name a successor trustee to step in, if something were to happen to you. This person should be familiar with your child and have no conflicts of interest with the money. The person should be financially competent and agree to serve when the time comes. You may also want to consider a professional or corporate trustee as a co-trustee. This trustee can act as the investment manager of the assets or take over the administrative tasks surrounding the trust and help with the coordination of SSI and Medicaid benefits.
Having a corporate trustee can provide some relief to the other trustee who may have other responsibilities to focus on. An alternative option is to name a “trust protector” who can advise the trustee on issues around investments and government benefits. The trust protector will not have any legal authority over the trust but can provide support when needed.
Finally, the trust should be accompanied by a Letter of Intent, written by you. This is not a legal document, but it outlines, in specific detail, your wishes for your child when you pass away. This document will be helpful for your successor trustee and other family members who will be supporting your child.
There are many complexities surrounding special needs trusts and special needs planning in general. Be sure to seek guidance from professionals who have expertise in this area. To learn more about how the advisers at Modera can help you, contact us at advice@moderawealth.com.
Modera Wealth Management., LLC is an SEC registered investment adviser with places of business in Massachusetts, New Jersey, Georgia, North Carolina and Florida. SEC registration does not imply any level of skill or training. Modera may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements.
For additional information about Modera, including its registration status, fees and services and/or a copy of our Form ADV Disclosure Brochure, please contact us or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov). A full description of the firm’s business operations and service offerings is contained in our Disclosure Brochure which appears as Part 2A of Form ADV. Please read the Disclosure Brochure carefully before you invest or send money.
This article is limited to the dissemination of general information about Modera’s investment advisory and financial planning services that is not suitable for everyone. Nothing herein should be interpreted or construed as investment advice nor as legal, tax or accounting advice nor as personalized financial planning, tax planning or wealth management advice. For legal, tax and accountingrelated matters, we recommend you seek the advice of a qualified attorney or accountant. This article is not a substitute for personalized investment or financial planning from Modera. There is no guarantee that the views and opinions expressed herein will come to pass, and the information herein should not be considered a solicitation to engage in a particular investment or financial planning strategy. The statements and opinions expressed in this article are subject to change without notice based on changes in the law and other conditions.
This content and information was created by a third party and not The College. The College assumes no legal liability for the accuracy, completeness, or usefulness of any such content and information and the views expressed therein do not necessarily represent the views of The College.