A Special Plan - Families of Special Needs Children Need to Take Steps to Safeguard Their Financial Future
[Theresa Walker for The Orange County Register.]
Family Challenges: Paul and Elaine Weber had many unwelcome surprises in planning for the future of their children, Ben, 13, who is diabetic, and Kim, 11, who is autistic. Matters got more complicated recently when Paul was diagnosed with cancer. Elaine and Paul Weber started thinking seriously about the long- term future care of their daughter Kim when she was 6. They finally accepted the tough emotional truth that nothing they tried was going to "fix" Kim's autism.
She wasn't going to be able to live independently as an adult. It was up to them to create the financial foundation to support Kim long past the days when they would be around. The Webers had taken some steps - putting money in a savings account for Kim, buying savings bonds.
But at a workshop sponsored by the Autism Society of Orange County, the Costa Mesa couple learned that what they thought wouldn't be nearly enough financial security for their daughter was actually too much.
They found out what many parents of special-needs children don't know: Leaving assets of more than $2,000 triggers a loss of government benefits. That's all it takes to cut off Supplemental Security Income, or SSI, which pays for the food, clothing and shelter of a disabled adult, or an underage child in a low-income family.
Even more worrisome, disqualification from SSI means losing the crucial medical coverage provided through Medicaid, or Medi-Cal in California, and perhaps having to pay money back to the state. "I was blown away by that one," Elaine Weber says of the wake-up call she got at that workshop five years ago. "I was like, how horrible, we can't leave her any money."
But she also learned of something called a special-needs trust, established by law in 1993 for the accumulation of funds that are used strictly for lifestyle needs - education, transportation, leisure – and don't jeopardize government benefits. "If I hadn't gone to that seminar," she says, "I wouldn't know any of this." Financial-planning experts estimate that less than 15 percent of parents with special-needs children have done any sufficient planning for the future - financial, legal or medical.
Tips and resources for special-needs planning
Bart Stevens of Bart Stevens Special Planning in Scottsdale, Ariz., has a book and a kit to help with prep work. Both "The ABC's of Special Needs Planning Made Easy" ($34.95) and his "Special Needs Planning Kit" ($240) are available at his Web site or by calling (888) 447-2525. MetDESK special-needs planning, a service of Metropolitan Life Insurance Co., offers free seminars, attorney referrals and other information. Go to the Web site or call (877) 638-3375.
Other useful Web sites include:
"It's partly from lack of knowledge, and partly from hearing so many different things you're not sure what to do," says Nadine Vogel, mother of two special-needs children and founder of the 10-year-old nonprofit organization Special Needs Advocate for Parents, or SNAP. "Part of it, too, is that it's emotionally daunting. A family has to really come to terms with the child's diagnosis and their lifetime issues."
Parents typically don't know, for instance, that once their child reaches adulthood at 18, the law does not allow anyone else to make medical decisions for them without a legal document in place naming a medical guardian, Vogel says. Otherwise, if the disabled adult is developmentally incapable, the hospital or the state will make those decisions. There's a growing effort to make parents aware of special-needs planning, including workshops sponsored by support and advocacy groups, school districts, and financial-service companies.
Vogel's personal experience and the large number of financial queries made to the SNAP hot line prompted her to persuade her employer, Metropolitan Life Insurance Co., to launch MetDESK (Division of Estate Planning for Special Kids), which she oversees, in 1998.
Joe Sahabu, a MetDESK specialist based in Fullerton, says he has given many free seminars in the Los Angeles area over the past three years and is working to make his services better known in Orange County. He is willing to sit down with anyone, no matter the size of the group. Call Sahabu at (714) 255-8158 or (800) 492-3553, Ext. 1286, or e-mail jsahabu@m... .
"Even one person, I'll go and talk to them because I think it is so important," Sahabu says. "It's never too early to start, and it's only too late if the parents pass away. As long as one parent is around, it's never too late to make a plan." The Webers, who both work, were in the process of taking out joint survivor life insurance, also known as a second-to-die or last-to-die policy, that would pay into the special-needs trust fund for Kim, now 11, only after both parents are dead.
But before the insurance company got back to them, Paul was diagnosed this summer with cancer and is undergoing chemotherapy. Now Elaine Weber is looking at taking out a $500,000 policy on herself that she expects will cost about $400 a month. The cost of a $500,000 joint survivor policy for a couple runs about half that. "I never thought at 46, I'd be sitting here with my husband having cancer," she says. "There's just like this list of things that should be done. It's a lot of work, but when it's done, it's done. Once everything is in place, it really will be peace of mind." The Webers' dilemma underscores what Bart Stevens says he stresses to those who attend the seminars that his Arizona-based company, Bart Stevens Special Needs Planning, puts on around the country: Families with special-needs children - be they underage or adults - can least afford to procrastinate when it comes to long-term planning.
"I tell them what if you get in an accident when you leave this seminar? What's going to happen to your child?" says Stevens, who has focused on special-needs planning the past 10 years. "That usually opens their eyes. They've got to do it. They can't put it off."