Special Needs Financial Planning
I shared in the August newsletter that my goal over the next few months was to share the steps of planning through the Lifestages for families of an individual with Special Needs. Below is the Timeline segmented into four distinct stages.  The purpose of segmenting and breaking up the timeline into these stages was to make the process and understanding of the steps more manageable.   Although it may make the most sense for me to start by sharing the detail and information within Stage 1, I have decided that starting with Stage 3 may be the most impactful.  This is the stage of a disabled individuals’ life from 18 through young adulthood when there is a transition from public school to the “real world”.    In my practice, I have found this to be the time period with the greatest call to action by parents.
Turning Back the Hands of Time

Oftentimes when working with my clients, I will hear them say, “I should have done that differently, or if only I had decided to start saving for retirement earlier, or I didn’t really know what to do, so I didn’t do anything".    Comments like these drive me to educate and encourage those families who have children with special needs to understand the importance of prioritizing planning, and truly implementing this Plan.   It is not possible to go back and make up for lost time, or turn back the hands of time!  
Why Do You Need a Plan?
Having a child with a disability a generation ago meant there were limited options for your child’s present, and future. There were two choices: a person could stay at home with his or her family or be placed in an institutional setting.  The theory was that an institutional setting could provide the best lifetime care for the individual.  If the family chose to keep the care for the disabled child within the home it meant there were limited supports and very few options.  Fortunately, after years of advocacy every child was provided with the legal right to a public education. The persistence of parents from previous generations has resulted in a free appropriate public education (FAPE) becoming an entitlement for all children.   Greater opportunity only increases the many reasons why parents need to Plan for their child’s future, especially the pivotal time when a child becomes in adult and no longer have the comfort, routine, and resources provided through the public school system.

Reasons for the Need to Plan Include:
  • Shrinking Government Resources
  • Lengthening of life span of individuals with disabilities
  • Increasing population of individuals with disabilities
  • Increasing demands on services
  • Increasing costs of long term care
How Can Special Needs Planning Help?
The Planning can help to manage, or even mitigate some of challenges that are impacting individuals with special needs today because of the increased opportunities. 

Let me share a Case Study with you of one of my clients, and the planning we have completed for their child who is preparing to leave the school system at the age of 19. 

Case Study Family:
Parents – Paul (55) and Ann (52)
Son Ben 21 and in college at University of Madison
Daughter Abby 19 and in last year of High School - she has cerebral palsy and is in a wheelchair. 

Case Study Financials:
  • Paul has multiple 401(k), and IRA Accounts with different investment custodians – he would like assistance with knowing if he and Ann are on track to retire @ age 65.
  • Paul currently has Life Insurance through his employer worth 3x’s his salary and a premium which increases every five years. Ann has a Term Policy that was purchased 19 years ago when she stopped working to stay home with Abby. This was a 20 year term which will expire when she is 53.
  • Paul and Ann set up a 529 College Savings Plan for their son Ben 10 years ago which has helped with his post secondary tuition. They did not know where to save for Abby, so they have accumulated savings in a savings account that is in their name.
  • Paul’s father recently passed away and left money to Paul for Ben and Abby. Ben’s funds were contributed to his 529 Account. The funds for Abby’s were placed into Paul and Ann's savings account.  
  • Paul and Ann own a condominium that they have been using as a rental property. They would like for Abby to be able to live there someday with home care assistance.
  • They do not currently have legal documents in place, and need a Will, Trust – Supplemental Needs Trust, Guardianship of Abby and both Health Care and Financial Power of Attorney.
Special Needs Financial Planning Services:
Comprehensive Financial Planning allows for the evaluation of all areas of a families finances from investments, insurance, cash flow/budgeting, etc. Below are a few of the areas we focused on as well as the solutions provided in summary.

  • Investment Recommendations were provided after a thorough review of all of Paul’s accounts, as well as Risk Tolerance and Time Horizon. 
  • Retirement Needs and Income Analysis completed to help Paul and Ann know how much they need to be saving to meet their goal of retirement at age 65, as well as what their retirement income will be monthly when they do retire, and how long the assets will last.
  • Education of funding and savings sources for Abby’s current and future supplemental income with an emphasis on the new 529 ABLE Savings Plans. Specific recommendations provided for taking the money from Paul’s Father, and maximizing the 2017 contribution of $14,000 into an ABLE Account.
  • Insurance Needs Analysis completed for both Paul and Anna with new policies issued which will keep a death benefit in force permanently to allow for money to fund Abby’s Special Needs Trust upon the death of one or both parents.
  • Recommendations, and collaboration with Estate Planning Attorney to implement all necessary legal documents, as well as provide guidance as to ownership of the condo that Abby will move into to not negatively impact her public benefits. 
  • Cash Flow/Budgeting Evaluation was completed to assist Paul and Ann with knowing what Abby's Supplemental Income Needs would be when she receives her monthly Supplemental Security Income (SSI) Federal and State Income compared to what all of her expenses will be for housing, transportation, health care, and discretionary needs.

The goal of the Planning is to insure the parents are able to continue with their goals, and dreams to take care of themselves, while at the same time insuring there are steps in place for their child's future.  I have shared in a past newsletter the concept of failing to plan and how much this can negatively impact financial goals for families and their loved ones with a disability.   As parents, we know that one of our biggest fears we are concerned about who will take care of my child if/when they are no longer able to.   Don’t let this fear, or lack of information and action keep you from a Plan. There are ways to reduce these fears and give you confidence that the Plan will be there when it’s needed. 
Please consider attending my Presentation below to learn more about the Special Needs Financial Planning Lifestages. No matter what age your child is you will find valuable information to determine if you are doing the things you need to insure your child has a secure Financial Future. 
When: Thursday October 12 @ 8pm
What: Special Needs Financial Planning Through the Lifestages
Who:  Down Syndrome Association of Wisconsin Webinar - DSAW
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