Welcome to Personal Finance for Long Term Investors, where we believe Benjamin Franklin's advice that an investment in knowledge pays the best interest. Olden finances and in your life. Every episode teaches you personal finance and long term investing in simple terms. Now, here's your host, Jesse Kramer. Welcome to Personal Finance for Long Term Investors, episode 119. My name is Jesse Kramer. By day, I work at a fiduciary wealth management firm helping clients nationwide. You can learn more at bestinterest.blog/work. The link is in the show notes. By night, I write the best interest blog. I host this podcast. I put out a weekly email newsletter, all of which help busy professionals and retirees avoid mistakes and grow their wealth by simplifying investing, taxes, and retirement planning. And some cool news. I'm now officially going to three episodes a month of the podcast. Three episodes a month. I asked you all via my weekly newsletter to fill out a poll. By the way, if you haven't subscribed to the newsletter, you can go join 4,000 subscribers all for free by signing up at bestinterest.blog. And the consensus of that poll was clear. More frequent episodes would be great, but the episode length cannot go any longer. So, I'm going to honor those wishes and send out three episodes a month, but not bombard you with super duper long episodes anymore. So every month, my plan is to have one ask me anything AMA episode because you guys are giving me amazing feedback on those. I'm going to have one deep dive episode about a single specific topic, and that's what we're doing today. And then I'll have one episode featuring an expert guest. So today's deep dive episode is going to be on the topic of special needs planning. So here's my ask. Maybe special needs planning, you know, planning for a special needs child, having a special needs child doesn't apply to you, doesn't apply to your family, but I would bet you know someone who it does apply to. And maybe just maybe this episode will introduce that person and that family to just one or two ideas that will make their burden lighter, that will help them make a smart financial or legal decision on behalf of their special needs child. It'll help them sleep at night a little bit better knowing that their child will be taking care of. So my ask to you is to share this episode with that person in your life and see if it makes their life a little bit better. But before we start, we do have a review of the week from the Joel 11. Joel gives a five star review saying explaining the complex situation. I love this podcast. Jesse explains the complex world of money in a way my kids can even understand. I highly recommend it. Joel, thank you for that kind review. You can shoot me an email to
[email protected] and I'll get you hooked up with a super soft podcast t-shirt. So now on to a special needs planning. I want to start the episode with a little story, a personal story. In September of this year, September of 2025, our daughter had what I would call her first serious sickness of her life. You know, definitely more than just a cold, more than just a day or two. She had a fever on her off for five days. Really didn't get back up to full speed for seven or eight days. She was cranky and crying way more than normal during the days seeking her comfort. She was definitely in pain from some of the symptoms and at only 15 months old, she couldn't really express to us exactly what was wrong, how we could make it better. She'd cry on and off during her sleep during the night and she's back to normal now full strength. It's awesome. But truly, for the first time as a parent, this little part of my heart broke for her because here's this helpless baby through no fault of her own. She's suffering. She's in pain. All she wants is to feel better, sleep through the nights and live her normal baby life. And if I could, I would snap my fingers and give that to her. But I couldn't. What I wanted to do was monitor her temperature, give her baby motrin, try to read into her cries as best we could to give her what she wanted. And then wait and see if it got better, see if she got better. Is the type of week that made me so thankful when she did recover back to normal. In my mind, we had to think about the many parents out there who have to deal with things on a regular basis, far worse than just a week long illness. So that's why today I want to focus on not only the emotional and human stakes, but also the financial stakes for when a child or another dependent has a disability or some sort of chronic illness. Because those circumstances require we plan not only for the parents' lifetimes, which is maybe what we're mostly thinking about here as listeners. But we also have to think for our child's full lifetime, not just when they're in the household, not just the 529 college plan. We have to think of our child's lifetime long beyond that. Another quick story I appreciate that as my dad drove me to Rochester to drop me off for my freshman year of college at the U of R, Meliara to any U of R listeners out there. We had to talk about this at the time that was going to be the first and biggest step towards me dropping off of the parental budget. Well, when someone has a child with a disability or a chronic disease, they might never be able to fall off the parental budget. But then there's so much more, so much more meaningful stuff and so many more anxiety-inducing questions. How will my child be cared for after I'm gone, after I die? How do I balance our personal needs today with tomorrow's needs and with the child's needs? We're going to dive deep on the topic of financial planning and a little bit of life planning for parents of special needs children and special needs adults. And we'll start with some life planning thoughts. Then dive into the unique financial challenges that special needs family space. And then we'll get into some key planning tools like government benefits, special needs trusts, able accounts and insurance planning. We'll get into broader family financial ideas like retirement planning for parents, sibling considerations and estate planning. And we'll end with some emotional and practical considerations and some action steps. So first, let's just talk about the life aspect. Now, I'm not a special needs expert, I'm not a therapist, not a doctor, just a guy online who reads and listens to what other people have to say. So I don't want to get into this lane too much because it's really not my lane. But here's what some smart people actually in that lane have to say. They say things like raising a child with special needs doesn't mean managing appointments or insurance forms. It means building a sustainable life both for the children and for you as their parents. First, it's about building a support system. You can't do it alone. Parents who thrive on this journey, they learn to lean on other people, extended family, friends, mentors, especially other parents walking a similar path. Sometimes the most valuable support isn't advice, but someone who simply understands what the daily ups and downs are. We all know those aspects of our own lives where we meet someone on a similar path and we say, "Oh yeah, you get it, right? You get empathized with me. You get what I'm going through. We feel each other's journey and being a special needs parent is a prime example of that." Second, communication matters even more than it normally matters. Communication between spouses, between siblings, between parents and teachers and doctors and therapists. Everyone needs to be on the same page. Misunderstandings can cause a lot of frustration, but clear, proactive communication helps make life smoother, again, both for the child and for the child's family. Third, we can think about routines and structure. Children in general, but especially children with special needs, often thrive when life is predictable. It doesn't necessarily have to mean rigid schedules, but it does mean creating rhythms that provide comfort and reduce stress. Children can be a safe foundation, you know, freeing up the rest of your time and energy, and the rest of your children's time and energy for some sort of growth and learning and progress. Not to mention, as the parent structure helps you get through your days and your weeks and months. The fourth thing to think about is care for the caregivers themselves. It might be the most overlooked aspect. In my reading online, this is where many parents feel a real internal struggle. They know how much they're sacrificing for the sake of their children, and it's a sacrifice that they want to make. It's something they would do 100 out of 100 times, but it doesn't make it any easier and everyone's well-being matters, and in the burnout is real. You can't pour from an empty cup, as they say. So building in some sort of rest time, whether it's five minutes of quiet in the morning or a full afternoon off, makes the entire family stronger. And then fifth, plan for the long term, not financially, but emotionally. Every parent of a special needs child wonders what will happen when I'm no longer here. While financial planning is one part of that answer, and we'll spend most of today's episode on that part of the conversation, equally important is making sure your child has a community, a network of caring people, a roadmap of their preferences and routines, almost as if it's a guidebook about your children for the future. Outside of the finances, outside of the legal questions, how will your child's life look when you're gone? And the last bit of advice on the life planning side is to celebrate the small wins. Life planning isn't just about mitigating challenges and reducing risks and thinking about insurance and estate planning. It's about noticing progress, embracing the little things, the joy, acknowledging the resilience that your family builds every single day. And from the reading, it seems like those moments, both big and small, are what carry families like this forward. But now let's transition to some financial topics, some unique financial challenges of special needs families. For most families, financial planning already feels like putting together a puzzle. In some cases, you have all the pieces, and now it's just about putting those pieces together. In other cases, most of the pieces are missing or unknown, so good luck solving that puzzle. The first job is just assembling all the pieces themselves. And the pieces are retirement, kids college, a mortgage, health care, insurance, taxes, estate planning, minimizing debts, and actually loving life along the way, ideally. But now imagine we had one more piece to that puzzle. Only this one doesn't really seem to fit well at all. It's more unpredictable. It somehow keeps on changing shape. And that's the reality for most families raising children with special needs. It's not just that it's more expensive. It's just a fundamentally different financial landscape. So, to talk about some of those unique challenges, the first one is higher ongoing costs. It's kind of the obvious one. It's more money out the door. Special needs families often face expenses far beyond what traditional financial planning assumes. Therapies, the specialized medical care, extra and inexpensive prescriptions, adaptive equipment, individualized education programs, transportation in home care, full time aids even. And those costs don't come with an end date often, right? For many parents, fully healthy and kind of neurotypical children, you can budget around milestones. They care until age five, school, college for four years. Maybe you're buying your kid a car at 16, something like that, Christmas gifts every year. I know that my children will eat more as teenagers and then they'll ask for more discretionary spending along the way. But the whole point is that we can budget for our kids based on their age, based on their age and life, and we know at some point that budget probably has an end date. But for special needs parents, they don't really get clean budget horizons. The needs persist sometimes for decades often far into adulthood. And even within categories.
It's like healthcare, the baseline is simply different. Many families worry about the occasional ER visit or braces, but special needs families think about weekly therapy. Annual surgeries, expensive medications, not fully covered by insurance. So all of this creates a higher and more persistent drag on their cash flow. Not a one-time hurdle, but a marathon of higher ongoing costs. The second unique financial challenge is unpredictability, uncertainty. Most children grow and learn gain independence in their late teens early 20s. And again, we know, by 18, my daughter will be in college and by 22, she'll be out and working and it makes planning at least somewhat linear. But first special needs child, will they be able to live independently? Will they ever work? Will they always require daily care? Will their health improve and stabilize or will it deteriorate? And those unknowns force families to plan kind of on multiple timelines all at once? It's something we all need to do. Planning multiple timelines is something we all need to do because we don't know, say, how investment markets or tax codes might change in the future. With a special needs family, imagine where one scenario where the child needs lifelong support, one where they achieve semi-independence, one where they end up thriving on their own. Those are very different scenarios, very different timelines. There's also unpredictability of public support. Will public government programs like Medicaid or SSI supplementary security income, local educational resources, will they still exist in their current form in 20 years? No one really knows. Parents have to wonder how much of a safety net will be there when they're gone. And that uncertainty isn't just stressful. It actually changes the math, too. It leads families to save more than they otherwise would because undershooting your goal has catastrophic consequences to your kids. And then there's the parental balancing act. We'll call it parents know they can't afford to only think about their special needs child. They still have to think about themselves. They have to think about other kids if they have other kids. It's where some guilt enters the equation. How can I say for my own retirement when my child might need care forever? Is it fair to help our special needs child at the cost of burdening our other children with college debt? Those are deeply emotional questions. And financially speaking, the challenge is prioritization. Every family faces trade-offs between retirement, college savings, present day spending. But for special needs families, the stakes are if they neglect their retirement, they risk becoming financially dependent on their other children later in life. And that's a burden no parent wants to place. But if they shortchange their other kids, they risk resentment or family fractures down the road or they're just making like harder for their other kids than they want. So you know traditional advice says you take care of your own oxygen mask first, right? That's kind of the metaphor. And the most common example is that you should save for your own retirement before you help your children with college savings. But when you have a child who may never be financially independent, that advice feels certainly inadequate if not even callous. You know, the balancing act for a special needs family, it's one of the most unique and heart-wrenching challenges that those families face. The last layer here on these unique challenges is the layer of time. Caring for a special needs child isn't just a financial commitment. There's a serious time commitment. And parents often have to reduce their hours at work to attend therapies or provide daily care. Career advancement opportunities are no longer there. They get missed. Business travel probably feels impossible. The time that other families might use to, I don't know, grind for a promotion, go on the extra family trip, start some sort of neighborhood side hustle. That time probably isn't available for a special needs family. If a special needs family is a dual income household, maybe one parent can step back, but that leaves the family with only one study paycheck, which changes everything about saving, about investing, about long-term financial planning. And that time cost, if you will, that opportunity cost of time. It's not really acknowledged in spreadsheets. It's hard to measure, but it's very real. Lost income potential can be one of the largest financial hits that any special needs family face I would wager. And unlike direct expenses where you can maybe cut or negotiate or get a tax rebate or apply for insurance, time is very finite and it's very hard to get it back. Money is never just money, right? Money is, it's not just about the money in any one situation, but particularly I think in these special needs situations. Money is security, money is love, money is peace of mind, money is time, and that makes financial decisions feel heavier, more charged, maybe even paralyzing at time. Because the lack of money, it equates to the lack of security for your child, the lack of love for your child, the lack of peace of mind for your child, it's not just money, it's very, very emotional. So what does it mean for financial planning? Well, it means traditional advice like, you know, save 15% of your income, invest in a 529, buy term life insurance and invest the difference, that advice might not fit for a special needs family. Instead, customized, flexible long-term plans that account for their unique realities. That's what special needs families need. Here's a quick ad, and then we'll get back to the show. You probably know that I love listener-inspired content, but this is my first listener-inspired advertisement. Frank asked me in short, "Jesse, is there a best time to start working with you as a client?" And the short answer is yes. There are two ideal times. One is at the beginning of a new year for probably some pretty obvious reasons, but the second one is right about now, September and October. It's the perfect time for year-end tax planning to ensure you find the correct balance of, rough conversions, tax gain or tax loss harvesting, making charitable gifts, spreading out any portfolio changes over multiple tax years, or whatever other tax dials we can turn for you. Working backward from December 31st tax deadline, the time to start those initial conversations is right now, August, September, maybe into early October. You want to give yourself and us enough runway to make sure we get this right for you. So if you're interested in starting a conversation with me and my colleagues, you can go to bestinterest.blog, backslashwork, and fill out the form there. Again, that's on my blog on the work with Jesse Page. The address is bestinterest.blog, backslashwork, and fill out the form. So we're going to dive deep right now into some of those realities, including special needs trusts, able accounts, government benefit programs, and life insurance. Starting with special needs trusts, every special needs family needs to consider a special needs trust. Many government programs, two examples, would be Medicaid and SSI supplementary security income, which we'll talk about in a few minutes. They set strict limits on a benefit series, assets, and income. So if your child directly inherits money or receives financial gifts in their name, your child's eligibility for those programs could be jeopardized. So that's where a special needs trust comes in. Instead of leaving assets directly to your child, you would leave your assets to the trust, or other people in life would leave their assets to the trust. The trust then pays for your child's supplemental needs, therapies, travel, home modifications, education, whatever it might be. But meanwhile, because the assets are not in your child's name, but instead in the trust's name, your child will remain eligible for government benefits. You can think of it as this financial Chinese wall, firewall, right, divider. The trust holds the resources, but it's structured so that they don't count against government eligibility. There are two main flavors of special needs trust, third party and first party. Third party, special needs trust is funded by parents, grandparents, other people, usually set up through state plans and very flexible and on the most common special needs trust. A first party special needs trust is funded with the child's own assets, maybe like an inheritance that the child received that was accidentally left directly to them, or maybe a legal settlement from some sort of action that the child was involved in. So first party special needs trusts have more restrictions that usually include a Medicaid payback provision if the beneficiary, if the special needs child were to die. Without any sort of special needs trust, some sort of well-meaning gift or inheritance might unintentionally knock your child off of their essential benefits. But with a trust, you keep those doors open. And as with all trusts, you name a trustee, going back to previous episodes and blog posts about the basics of a trust, every single trust out there has three important roles involved in it. So just a little background for your listeners, three important roles. The grantor who creates the trust, the beneficiary who benefits from the trust, and the trustee. And the trustee is the person who has a fiduciary obligation to act out the grantor's wishes for the trust. In some cases, the same person can play multiple roles, multiple of those three roles. But in the case of a special needs trust, it's hugely important that the trusted trustee is in place to enact the grantor's wishes, again, usually that would be like the parent's wishes, for the benefit of the beneficiary who would be the special needs child. One quick note, that trustee can be all the usual suspects, another family member, a close friend, a professional trustee, like a bank or a trust company or law firm. But specifically for special needs trusts, a nonprofit pooled trust might be the right or the best answer, a nonprofit pooled trustee. So this would be a nonprofit that manages multiple special needs trusts, pooling assets for investment purposes, but keeping separate accounts for each beneficiary. It usually results in lower costs than a professional trustee, but with the staff experienced specifically in disability-related issues. They're often, again, because it's a nonprofit, they're often mission driven, very familiar with the nuances of government programs. Now the cons would be less flexibility in investment or distribution decisions, probably less personalization than a family member or a close friend would provide, but still, a nonprofit pooled trust is really worth looking into if you're not familiar with it yet. And that's for a special needs trust. But moving on from special needs trust, we now have another key tool, the ABLE account, the LE, which is short for achieving a better life experience ABLE account. And it's a really nice kind of analogy in the financial planning world. We can think of ABLE accounts as the direct cousins of 529 college savings plans. They allow families to set aside money up to $19,000 a year in 2025, plus potentially a work-related contribution into a tax-advantaged account for a child with disabilities. The money grows inside that account tax-free. And as long as the withdrawals are used for a qualified disability expense, which is, you know, a broad category that includes housing, education, healthcare, transportation. Well, as long as it's used for a child, it's a great way to get a job.
for one of those qualified expenses, then the money comes out tax-free too. So again, very similar to the way a 529 works. And another big win is that ABLE accounts don't count against SSI or Medicaid eligibility. You can save up to a $100,000 currently inside an ABLE account without jeopardizing eligibility for SSI. And starting in 2025, funds from a qualified 529 College Savings Plan can be permanently rolled over into an ABLE account. So this would come up in a situation where maybe you have multiple children. One of the kids has special needs. Your kids who do end up going to college, they end up with extra money in the 529, you can roll the money over into an ABLE account. It also might come up in a situation where a child who you have been saving for a 529 4, at some point in their childhood, they become disabled or permanently disabled in some way. They probably are not going to go to college in the future, but now they could really use that money in an ABLE account. You can permanently roll money from a 529 into an ABLE account. There are some caveats or things to know, some nuances about ABLE accounts, to qualify for having an ABLE account, the disability, your child's disability must have been diagnosed before age 26. Although I believe that's soon expanding now to 46, thanks to new legislation. So that would be a big shift. And unlike a third party trust, an ABLE account is subject to a Medicaid payback when the beneficiary, if and when the beneficiary passes away. But in the right circumstances, ABLE accounts provide flexibility, they provide some control, and they definitely provide tax efficiency. They're very handy for day-to-day expenses of a special needs child, whereas a trust might be more geared towards kind of larger long-term support. Next, let's dive into the many government benefits programs. Special needs families, unfortunately, need to learn a bit of an alphabet soup. There's SSI, there's SSDI, Medicaid, Medicare, SNAP, and some more. And each program has its quirks, but broadly, SSI, supplemental security income, provides a monthly income for individuals with limited means who are disabled, blind, or elderly. For many special needs, children transitioning into adulthood, SSI becomes their core, their main income stream. SSDI, Social Security Disability Insurance, is different. It's tied to work history, but disabled adult children can sometimes qualify based on their parents' work record. It's important, it's a good wrinkle and important wrinkle to plan for. Medicaid and Medicare, and Casey, I've never said this before, maybe you've never heard this before, in case you confuse Medicaid and Medicare, Medicaid rhymes with paid because it's means-based, it's based on money. Well, Medicare rhymes with hair as in it's meant for people with no hair or white hair. It's for people who are 65-plus. Medicaid rhymes with paid, Medicare rhymes with hair, a little mnemonic that might help you out. Medicaid often provides healthcare coverage and critically long-term support services for special needs families. It often includes in-home care, day programs, community support, some things that private insurance might not cover, rarely covers in fact. Medicare does eventually enter a picture if a child qualifies through SSDI, so that's important. It can also apply after they reach age 65, but sometimes Medicare can enter the picture if the child qualifies through SSDI. And then SNAP, I mentioned that before, other programs in general SNAP is for food assistance, but there are state-level services, maybe even county and at city-level services other programs will get into a little bit of that later. The planning challenge isn't just knowing that these programs exist. A big part of it is just structuring the family's finances so that their eligibility is protected while still providing for a good quality of life. So that's why trusts, able accounts, careful gifting strategies do matter so much and then matter even more for a special needs family. Let's talk about life insurance. Life insurance is, for many parents, life insurance is a safety net. If I die, my family can stay afloat, but for special needs families, it's much more than that. It's often a funding mechanism for their child's life long care. To be more specific here, so I'll use my family as example for my family, our term life insurance policies are essentially designed to decay down to zero benefit as my children graduate college and proceed on with their own adult lives. Well, it's not perfect, but that's the general idea is that there will come a time in the future 20, 25 years from now, depending on how many kids we have, where we won't have any more life insurance because our kids will be gone, they'll be out of the nest, they'll be on their own, and the question of, if I die, will my family be screwed? By that time, 20 or 25 years from now, I'm hoping the answer is no. If I die, my family will still be okay. In the interim though, it's really nice to have term life insurance. For a special needs parent, their life insurance might stay enforced forever. If your child might never be financially independent, then your state plan needs some sort of pool of assets specifically earmarked for their support. And since few parents have millions of dollars sitting around, life insurance can be something that fills that gap. A key though is matching the insurance to the overall financial plan. So this is a place where some sort of permanent life insurance policy, you know, whole life policy, ensures that coverage doesn't expire at age 70 or age 80. This is a case where term life insurance may simply be too temporary. The policy's death benefit should flow into a special needs trust usually. I mean, it can salt a lawyer to be sure or a CFP, but usually that's how it you want it to work. The death benefit does not flow directly to the child. So this again avoids any sort of benefits eligibility issues that we talked about earlier. Parents should periodically revisit the amount of coverage as their costs and their circumstances change. And now life insurance in this context, it's not just leaving a windfall, it's ensuring continuity of care. Permanent life policies, as we've talked about here on the podcast many times before, they usually stink. They're usually not that great, but they are important here for special needs situations they really are. So how do we reconcile those two facts? The facts that for most of us, a whole life, a universal life, a permanent life insurance policy is not something we want. And yet in this case, they're very special and important. So let's start with the critique because it's valid permanent life insurance comes with high costs, much higher costs, much higher premiums than term life insurance. It comes with complexity, permanent life insurance are often much more hard to understand. The cash value component is often older sold. Permanent life insurance policies usually come with underperformance as an investment. If you're thinking of it as an investment, if it's sold to you as an investment, they typically lag behind simple low cost index funds. And permanent life policies are usually sales driven. Too often permanent life gets pushed because of the commissions, the high commissions, not because it's the right tool for the client, for the customer. And that's why for most families, the math is so clear, simply buy an inexpensive term coverage, not permanent, but a term coverage policy to protect against early death and then invest the difference in premiums elsewhere. But for special needs families, things are different. Families raising a child with lifelong support, they have a planning problem that by term and invest the difference, simply doesn't solve their planning problem. The permanent life policy provides certainty. You know that no matter what, there will be a benefit for the special needs trust. That's hard to replicate with investments alone given market volatility and longevity risks. So permanent life is usually a poor choice as an investment, but in special needs planning, it is not an investment. It's a funding mechanism for the special needs trust. It's not about cash value growth, it's not about beating the market, it's about creating a guarantee. A guaranteed pool of assets at the precise moment when the parents are no longer there to provide for their child. For most people, permanent life insurance is a hammer that's looking for a nail and we don't want to be that nail, but for special needs families, they are that perfect nail and permanent life insurance is the perfect tool that matches up for the job. Of course, just because it's a useful tool doesn't mean that all permanent policies are created equal. Families in this circumstance should still shop very carefully, work with a fiduciary minded planner, not a commissioned salesperson with a quota. They should keep it simple. Often a straightforward, whole life policy with the right death benefit is better than a complex universal policy with all the bells and whistles. The insurance policy should integrate with the trust. The policy's beneficiary should be the special needs trust, not the child directly. And then we want to right size the coverage. We don't need $5 million of coverage if $1 million is realistically going to meet the child's needs. The next topic I want to talk about is guardianship and legal planning. Money is only part of the equation in today's conversation. We actually need to ask about who will care for your child when you're gone. And that's where guardianship or conservatorship or powers of attorney come in. Parents need to decide who will make medical, legal and financial decisions for their child if the child can't make those decisions independently. And it's not just a legal hoop, it's really about peace of mind, knowing that someone trustworthy will advocate for your child in hospitals, in schools, in courtrooms. That legal planning can also cover letters of intent. These are non-binding documents that capture appearance wishes, capture maybe appearance insights about the child. Again, it's not a legal document, but you can think of it as a manual for future caregivers that are full of details that probably wouldn't go into legal form anyway. And so one important question that we've painted some pictures here today where a guardian or a power of attorney or a trustee or other similar roles are involved. An logical question might be, should one single person fill all of these roles to make life simpler or are there negative consequences for doing that? Some of the pros for having one person handle everything, we have simplicity. We have one decision maker, we have fewer cooks in the kitchen, we have consistency, the same values and judgment guide both financial and personal decisions. And then we have efficiency. There's less risk of a dispute between different parties because the guardian says "axe" but the trustee of a special needs trust says "why." But then there are certainly cons of having one person handle everything. First might just be overload. It's a really big responsibility, caregiving, financial management, legal decisions. It's understandable how it could burn someone out.
Possibly a bigger one than that is skill mismatch. There's no correlation between someone being an excellent caregiver and being an excellent money manager and vice versa. So I think it's important to have the right people in the right roles with our right skills. And then last is just some sort of system of checks and balances. Putting too much power for lack of a better term in one person increases the risk of mistakes of mismanagement in unfortunate but rare cases, but still real cases, some some cases of abuse. And my opinion from some professional experience, but more so from speaking with and reading with other expert opinions is to not overload one person. Guardianship and caregiving should usually be separate from financial and trust management. A mix of personal connection and professional oversight tends to work best. So I'm in favor of getting different people for different roles and how after your death for different caregiving, guardianship, powers of attorney and trustee like roles. It's important to get different people involved so that we get the right skills involved. We have the right checks and balances so that no one person becomes completely overloaded. Next, we can talk about some of the financial planning fundamentals. The fundamentals that everyone needs to think about, but we can talk about how these fundamentals change for special needs families because it is easy to focus and important to focus on the special tools like special needs trust and able accounts government programs. But forget that special needs families also need to do all of the basics, but that those basics look different for them. For example, emergency funds should probably be bigger than average because unexpected expenses are more common. Retirement planning is still very important. It's just simply harder. Parents need to protect their own financial futures, but they have a lot less discretionary income to save for the long run. A state planning, as we've already talked about, you know, wills and beneficiary designations and titling of accounts needs to be done really carefully to avoid accidentally leaving assets directly to the child. Something that's probably a boilerplate simple task for most families like naming a beneficiary might become a "we should talk to a professional to make sure we don't screw this up for a special needs family." Then there's just simply that guardianship, power of attorney, trusty aspect to a state planning that we just talked about. Tax planning is a little different too. It usually involves a lot of medical expense deductions, dependent care credits, the interplay of trusts and able distributions with family taxes. So in other words, it's really not just about all the unique tools that special needs families have at their disposal or need to be aware of. It's also about weaving those tools into the rest of their "normal financial foundation," which actually isn't that normal at all. This question, "Why do podcasters constantly ask for ratings and reviews?" Yes, they do help highlight our shows to new listeners. They help strangers find us on Apple Podcasts and Spotify. It's totally true and a good reason to ask for ratings and reviews, but I have something more important, at least more important to me. I want to know if you like this stuff. I want to know if you like my podcast episodes, my monologues, my guests. The information I share with you in the stories I tell, I want to improve and make your listening more enjoyable in the process. So yeah, I would love to read your reviews, and sure, if you throw a rating in there too, that's great. If you like what I'm doing, please share it with me. It's such a great feeling to read your feedback. I'd love to read your review or see a rating on Apple Podcasts or Spotify. Thank you. Let's talk about some community and professional resources, you know, special needs planning is complex, and a few families should can do it alone. And thankfully there is a web of resources available, some we've already talked about, some we haven't yet, and that web of resources goes from federal level Washington, DC down to your county clerk's office. On the federal level, we've already talked about the big three SSI, supplemental security income, for many families that is the foundation that's the monthly cash payments to children and adults with disabilities who do have to meet strict financial and medical eligibility standards. And that's again, those standards, that eligibility, that's why the special needs trust and tiling of accounts is so important. The dollar amounts for SSI aren't necessarily life changing, but SSI eligibility usually opens doors to other benefits, including Medicaid in most states. So that's why it's like SSI, getting SSI is kind of that first step. Again, even though the money itself might not be life changing, it's an open door to applying to other benefits. Medicaid, as I just mentioned, Medicaid is the primary healthcare safety net for people with disabilities. In most states, SSI eligibility automatically triggers Medicaid. And then we already talked about SSDI, Social Security Disability Insurance, program type to work history, adults with disabilities though sometimes qualify through a parent's record once the parent retires or passes away. And SSDI also brings access to Medicare after a waiting period, which can be an important supplement to Medicaid. So those are the big three on the federal level SSI, SSDI and Medicaid. Together those programs are the backbone, you can say, of federal support, but what about on the state level? On the state level, we have waivers and services. Every state layers its own programs on top of the federal framework. They often come through Medicaid waivers, sometimes called home and community-based services, HCBS, home and community-based services. There's fund services that allow individuals with disabilities to live at home or in the community rather than in institutions. This might include respite care for parents, home modifications, job training, and supported living arrangements. I will say that the details seem to vary widely and wildly by state, so eligibility and wait lists and the actual services that are offered can look very different. But almost every state has some version of these programs and they are actually often the most impactful benefits available. And then we can drill down even further to the county, the local, sometimes regional agencies that provide hands-on services that might include early intervention programs for young children, often coordinated through local school districts. I mean, a very simple one. I don't even know technically actually if this falls under the disability framework, but like our daughter is excellent in communicating in every single way except for actually forming syllables and words right now. She's only 15 months, 16 months old, right? She can point, she tells you exactly what kind of food she wants, but she's just not using her words. Not that all 16-month-olds have lots of words, but either way, through our county we were able to take her to a speech pathologist just to make sure that there wasn't any sort of deeper problem. And there wasn't, thankfully. But like that's an early intervention program. That's pretty important to have. Also on the county level we have developmental disability boards which connect families to case managers and other resources, transportation services for individuals who can't drive, respite programs that give parents and caregivers a much needed break. And then on top of government county resources, there are local nonprofits and advocacy groups and faith communities that often play a big role. Think of things like United Way or Autism Speaks or the National Down syndrome society. You know, a little aside here in Rochester, I'm a member of the Rochester Rotary Group. And our flagship service mission is to operate and fund a place called Sunshine Camp. Just south of Rochester. It's a fully accessible 150 acre residential summer camp dedicated though to children and young adults. I think the older kids tend to be a college age. With physical or developmental disabilities, it offers them an inclusive summer camp experience one week at a time. It has no barrier to participation. The children attend for free thanks to community support, thanks to Rotarian support. And one of the more touching things that I remember hearing when I first learned about Sunshine Camp, it was a parent of one of the kids who said, "I know my child's having the time of their life with other kids just like them. And as much as I love caring for my child, I get to have a week off too." And I think that's a perfect example of a nonprofit with a dedicated mission helping special needs families. And those types of resources are hopefully available in your region too wherever you are. Those groups help families navigate the maze and provide grants for equipment, simply creating a community for parents who need support. I've heard a lot of good feedback from special needs families just about the role of different professionals in their lives, special needs attorneys, CFPs, social workers, healthcare advocates, to translate the jargon, to coordinate applications to ensure that benefits are structured properly. They might be mostly minor interactions, but they're important interactions nonetheless. And if we pull that all together and then wrap up this episode, special needs planning is not just about finding one magic solution. Instead, it's about these many different layers of support as we've talked about. Trusts for long-term financial protection, able accounts for flexible spending. Government benefits truly is the backbone of your resources, life insurance as a funding source for a trust, guardianship and legal planning for decision-making, fundamentals, making sure that the family has its own fundamentals taking care of too, your retirement as parents, your tax planning, your estate work, and then some community and professional support to tie it all together. Uncombined, they create a framework that lets parents of special needs families breathe just a little bit easier. Thanks for tuning in to this episode of Personal Finance for Long-Term Investors. If you have a question for Jesse to answer on a future episode, send him an email over at its blog. The best interest. His email address is
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