Do not pay the cost of lack of communication
By Rob Wrubel, CFP®, AIF®
One step in my “Blueprints” process of planning for families with special needs includes helping people understand the importance of communicating with other family members about the planning work they are doing. Too often I speak with people about their situations where a well-meaning family member created an issue by not understanding that their good intentions could cause damage.
Imagine the scenario. You spend time to put together a financial plan for your family, engage an attorney to create legal plans and a special needs trust and then begin building or adding to your financial resources to fund your life goals, including taking care of the special needs person. You have invested a significant amount of time. You have spent money to create documents that will protect benefits that could value tens of thousands or more dollars each year.
The planning goes to waste as a result of someone not being aware of or understanding your planning. Money shows up for the special needs person from an IRA, insurance policy or estate. This money can be a disaster for the special needs person.
Families have expressed some version of the following about their family members and their desire to commit funds to benefit the person with special needs.
“I have a sister who wants to leave my child as a beneficiary of her life insurance policy.”
“Mom has significant wealth and plans to leave it to my daughter.”
“My parents have set up an education account for my son in case he is able to go to college.”
“Dad gives my brother spending money whenever he sees him.”
“Grandma died last year and left everything to my sister.”
Take time to educate your family, friends and other people concerned about your family. You have taken the right steps to protect available benefits on your own and you need to request others to help you in your efforts.
Does this make you a bit uncomfortable? You do not want to talk about money with your family? Well guess what? You have joined a club with many members. Family members usually do not discuss their finances with each other. There are plenty of reasons. Parents with some degree of wealth want their children to make it on their own and so do not disclose their incomes and assets. Parents who have not accumulated anything may not want their children to know from embarrassment or fear of panicking their children. Sisters and brothers and assorted in-laws prefer to keep their financial lives private instead of invoking competition or jealousy into a relationship.
You will need to get through this slight discomfort to start communicating with others why you have taken your time and money to create a special needs plan and legal documents. The cost of not communicating is too big.
Remember, you are not asking for money. You are not asking for approval of your actions. You are not even having this discussion for your own benefit – you are doing it for the person in your life who has special needs. Tell your family and friends that your financial planner is making you have this conversation if you want.
Let me walk you through the conversation you can have.
Find a quiet place and time to have the conversation – not when children are running around, in the middle of a baseball game or at a concert. This is an important conversation with information that must be remembered.
Start by saying you are not asking for anything, other than a chance to help your Mom, Dad, brother or sister understand something important to you.
Next, talk about your special needs family member and how there are government benefits currently available that you are trying to protect. The details of the programs are not important. You need to have the person understand that these benefits are highly valuable and may provide for the care, home and support of your family member. Use whatever language works for you.
Discuss the planning you have done. You have met with a financial planner and attorney and made some changes to the way you do things to protect your special needs loved one. Tell your Mom or Dad, brother or sister that you are talking to them to make sure that your planning will work over time.
At this point, you can say that you do not expect anyone else to leave money to help care for the special needs family member. You are having this conversation to make sure that anyone who does want to help take the steps to help without compromising the work you have done.
This opens the door to your family to ask questions about special needs planning. You do not have to have all the answers and all the details. Your goal is to make sure your friends and family members know that they should consult with you before doing anything to help you special needs family loved one.
If your Mom or Dad asks how they can contribute or help, fantastic. If your brother or sister wants to help, wonderful. If they do not, at least you have helped educate them if they decide to do something in the future. You do not have to be the expert to answer all of their questions about techniques, gifting, tax, investments, insurance and estate planning. You have team members at this point who can help provide counsel to anyone interested in making current or legacy gifts to your trust.
Communicate with people around you and your family about the steps you have taken. So many families with special needs members do not understand the basics of special needs financial and legal planning. Do not expect other generations and people to know either. Your plans could fall apart by someone trying to help. Help those people make good decisions for your family. In the end, you will have helped protect your family member with special needs.
Rob Wrubel, CFP,® AIF® is a Senior Investment Consultant with Cascade Investment Group, member FINRA & SIPC. Cascade Investment Group is not a tax or legal advisor. You should always consult with your tax advisor or attorney before taking any actions that may have tax consequences. Call Rob at (719) 632-0818 to set an appointment.