By CYNTHIA HADDAD
The need for families and individuals with special needs to plan and save for the future has never been greater than it is today. Demographics are at the heart of this daunting trend: while the number of individuals diagnosed with a disability is growing at double digit rates, budgeted government resources, even when adjusted for inflation, cannot come close to keeping pace.
The Special Needs Planning Corner will feature important elements of planning for families of individuals with disabilities, as well as shining a spotlight on some of the major mistakes advisors inadvertently make that could have lasting and serious consequences.
When our team presents at professional conferences for advisors, we often hear:
“I don’t have any clients with special needs.”
As an advisor with an established practice, you are most probably working with a family or families who have a child with special needs – and this is information you need to know. Assume 7 percent of the under 65 population has a disability. (Source: 2016 Disability Statistics Annual report). It is statistically unlikely that you do not have a client with a disability. It may be a client’s child or it may be a client’s grandchild who will come into the planning conversation.
Many times, advisors do not feel comfortable asking clients about disabilities. In turn, families may also be reluctant to bring the subject up. Opening up this communication is crucial to planning effectively and requires using the right language. Knowing your client is key to retaining your client, and asking the right questions is key. More to follow on this topic in future columns.
“I am a CFP and very experienced in comprehensive financial planning. How is Special Needs Planning different?”
Families of individuals with special needs have the same baseline planning needs as traditional families: buying a home, saving for college and retirement and estate planning. In addition to these needs, families with special needs face additional challenges. Having a child with special needs requires that families plan for two generations, as their child with a disability may need parents’ financial assistance and support throughout their life. The Special Needs Planning Timeline outlines the traditional financial planning timeline as well as identifying various pressure points when a child’s services and/or benefits will change.
For example, a child’s entitlements will end when they leave school, at age 21 or 22. When educational entitlements end, significant financial resources and supports also end. Planning for this transition well in advance allows parents to save for this life change and to explore options and alternatives for when their child leaves school.
What’s SO special about Special Needs Planning?
While every client has a unique set of circumstances, identifying the financial and human resources needed to provide lifetime supports for a person with a disability requires both specialized knowledge and professional expertise. In complex situations, reaching out for help from qualified professionals with experience in the disability field is critical. There is no one product or one service that provides a solution but there is a process; that is Special Needs Planning.
Cynthia Haddad, CFP, is Co-founder of Special Needs Financial Planning. With over 20 years of experience, Cindy is a committed and invaluable partner to families planning the lifelong care for their family member with special needs. As a sister of an adult brother with disabilities, Cindy has dedicated her career to helping other families address their unique financial planning requirements.