CRESCENDO NOTES Special Needs Financial Planning

Special Needs Lifestage Planning - Stage 1: Diagnosis & Planning for Your "New Normal"

I have shared in past newsletters that my personal story with Special Needs began 24 hours after my youngest daughter Emily was born.  This was when we were told by our Pediatrician that Emily exhibited characteristics of Down syndrome, and would need further testing to confirm. It was 72 hours after her birth when the blood test came in and a final diagnosis was made. Although it would take many days, weeks, and months to truly wrap our heads around this diagnosis, our "new normal" started on this day.

Diagnosis - Stage 1: Down syndrome is one of several disabilities which is diagnosed upon birth, however many are not. It could take several years before a child is given a definitive diagnosis of Autism.  Parents will begin their journey with their child with special needs upon the timing of this diagnosis. The Special Needs Timeline is meant to be a roadmap to assist parents, and families with the financial decisions that need to be made along the way.  Diagnosis – may be, but not always at birth Understanding Support Services Early Intervention - County Level - Birth to Three - Individual Family Service Plan(IFSP) Medicaid(Health Insurance) – Katie Beckett Parent/Legal Advocate Education on Special Need/Disability Emotional Support Support Organizations – Down Syndrome Association of WI/Autism Society of SEWI/Broadscope/WI Upside Down, etc.

Traditional Financial Planning - Stage 1: When parents welcome a “typical” newborn into their family, it is important for them to take time to evaluate their finances.   Areas to evaluate and make changes to include the following: Manage Cash Flow and Budgeting – where does your money come from(income), and where does it go (expenses/savings/spending)? Create an Emergency fund in case of job loss, unexpected expenses, etc. Save for own retirement(401(k)/403(b)/IRA), should maximize employer matching contribution. Utilize Flexible Savings(FSA), and Health Savings Accounts(HSA) for health and child care costs? Determine savings vehicle for College Education Expenses – UGMA/UTMA/529/Life Insurance. Risk Protection - purchase Life Insurance(Term) and Long-Term Disability for parents – “what if?” Estate Planning – set up a Will, Trust, Health Care and Financial Power of Attorney, Guardians

Special Needs Financial Planning - Stage 1: There are many Financial Planning similarities in the first stages of your child’s life. However, there are some key areas where different solutions, and decisions are required as shown below in WHITE: Manage Cash Flow and Budgeting – where does your money come from(income), and where does it go(expenses/spending)? Emergency fund in case of job loss, unexpected expenses, etc. Save for own retirement(401(k)/403(b)/IRA) – do you have employer match? Utilize Flexible Savings(FSA), and Health Savings Accounts(HSA). Dependent Care – Child Care Costs Set up 529 ABLE Savings Plan – pay for Qualified Disability Expenses Maximize public benefits – Medicaid/Waiver Programs Purchase Life Insurance (Permanent and Term) and Long Term Disability Estate Planning – set up a Will, Trust to include Supplemental Special Needs Trust, Health Care and Financial Power of Attorney – Guardian? Letter of Intent to provide non legal wishes and plans for child

Case Study of Existing Client - Stage 1:

Existing Client Case: Dad (37) and Mom (34) Three children – youngest is 2 yr old with Down syndrome Life Insurance – 20-year Term purchased at ages of 27, and 23. Multiple 401(k) Plans from job changes. Parent student loan debt to manage Grandparents want to gift to children equally Own rental property for income Estate Planning completed prior to third child born – Trust, but no Supplemental Needs Trust

Special Needs Planning Services Provided in Summary: Cash Flow and Spending Analysis completed to help parents identify amount available for savings. Debt Evaluation on education loan with guidance for repayment from existing income sources. Insurance Needs Analysis and Recommendations completed to insure risk protection in place which will be there to supplement income for special needs child during their lifetime. Investment Review completed to provide guidance on managing past retirement plan accounts, and consolidated to better manage asset allocation and risk. Referral to Estate Planning Attorney who specializes in Special Needs to update existing legal documents now that third child will require a Supplemental Needs Trust to maintain and protect public benefits. 529 ABLE Savings Plan Evaluation and Account Opening process completed to allow for financial gifts from grandparents to be allocated to child with Special Needs.

Raising a child with special needs is different in many ways and these differences also impact the financial decisions that need to be made in the short, mid and long term while raising your child.  Don’t let these “differences” keep you from taking action . Starting early, when your child is young gives you a tremendous head start, and allows for less tough decisions down the road.

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Do you have a PLAN? Schedule a Discovery Meeting with me.

UPCOMING PRESENTATION   When: Wednesday, November 15 @ Noon What: Understanding 529 ABLE Savings Accounts Who:  Association for Women Lawyers Where : Godfrey and Kahn S.C. 833 East Michigan Street Milwaukee, WI

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