Key Steps For Special Needs Families
Rob Wrubel CFP®, AIF®
We use the metaphor of building a house when talking about long-range planning for families with a special needs member. A house is tangible, something we all understand (even apartment and condo dwellers) and all need. A person cannot live a fruitful, fulfilling life without a roof over her head and a place to prepare meals and create a home each day.
A special needs plan takes the route of building a home. You do not wake up one morning and say to yourself, “Today is the day! I am going to build a brand new home.” You do not finish building a house overnight.
The first step in building a new home is to determine a location, sketch some drawings and think though key features you will need. Do you want a home in the mountains, on the plains, by the shore or near a certain city? Do you want a ranch type home or multi-story? How many bedrooms do you need? How many bathrooms? How much do you plan to spend and where will the money come from? You don’t want to build your dream home then find out you have to move in six months.
So often, families with special needs members start building before planning. People do things like jump to fund accounts, draw up legal documents and take out insurance policies before having a coordinated plan in place. They have thoughts in their minds about what they need, without sketching it out or finding advice to put it all together.
There are many steps in the process of building a strong special needs plan. These steps are broken down into five separate groups – Envisioning The Future, Building Your Foundation, Framing The House, A Roof Over Your Head and Finishing Touches.
Envisioning The Future. You need to determine what you want by writing out desired outcomes for yourself and your special needs family member. This means you must find time to think and dream. After you have a long list of what you want, you will prioritize these goals. Is independent living the most important consideration? Are there health issues that must be dealt with today? Will there be ongoing unfunded medical needs you need to plan to meet? Are transportation needs the biggest priority?
Building Your Foundation. I have yet to meet a family that does not require legal work to be in place. The special needs trust is a key element to a strong special needs plan. You may create enough assets to pay for future expenses, planning to have Supplemental Security Income and Medicaid as a safety net. Without a special needs trust, you limit access to certain programs and may lose any available government benefits. A special needs trust must be considered by every family.
Framing The House. No one wants to live in a foundation and yet, many special needs families start and stop with a special needs trust. A necessary element, but not the end. The foundation supports the next phases of building. You frame your special needs plan with four key pillars – eliminating debt, emergency funds, retirement savings and long-term investing. Each of these supports will be needed to accomplish your goals.
A Roof Over Your Head. The roof protects you from sudden disruptions – like rain, storms or a tree falling down. You need protection elements in place as you build your financial resources. You will want to make sure you have term life insurance, disability insurance and appropriate home and auto insurance.
Finishing Touches. I don’t know of anyone who has a house who is finished with it. There is always something extra to do, always some place to make the home more livable, more enjoyable and better. Special needs planning is no different. Over time, you will want to assemble a trust advisory committee, build social circles and extend the options you want for your family.
When I was in my mid-twenties, a friend of a friend decided to build a log cabin in the woods. On his own. Without professional help. He had “party” weekends where he invited friends to help him move logs, trim bark and to work on the house. I went one weekend and decided there was no way I would even walk in the structure as it was hard to tell if it would last forever or fall over with the next breeze. I am not sure if this house every got built.
Most of us do not want to build a house by ourselves; we hire contractors, architects and an entire team to do it. We rely on their expertise, experience and advice. The same is true with special needs planning. Take time before the end of the year to meet with your team and make sure your blueprints reflect your goals and dreams.
Rob Wrubel CFP®, AIF®, is a Senior Vice President – Investments with Cascade Investment Group, member FINRA & SIPC. Rob is also a father of a daughter with Down syndrome. 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.719-632-0818