Magazine article The Exceptional Parent

What to Tell Loved Ones about Your Family's Financial Strategy: Information of Interest to People with Disabilities and Other Special Needs and Their Families

Magazine article The Exceptional Parent

What to Tell Loved Ones about Your Family's Financial Strategy: Information of Interest to People with Disabilities and Other Special Needs and Their Families

Article excerpt

For an individual or family with special needs, having a financial strategy or a life care plan in place can relieve a great deal of stress and help make the future seem less unpredictable. It takes some work, initially, to get it done, and annual reviews to keep it on track. But one wrong move by a well-meaning friend or relative can undo all your effort.

If you've created a financial strategy, protect it. Have a conversation with friends and family, or draft a letter you can send to them. Here are some things you may want to tell them.

We've created a strategy

To begin with, let them know that you have a strategy. This one fact, without providing any details of your game plan, may provide some immediate relief to those who understand your challenges and have been worrying about you. Let them know that you've been working with financial and legal professionals who are skilled in serving people with special needs.

"You know your family best, so you'll know the best way to inform them," says Blake Hansen (1), who is a Special Care Planner with MassMutual Intermountain West (2) in Salt Lake City, Utah, a general agency of Massachusetts Mutual Life Insurance Company (MassMutual), "You might have separate conversations with individuals at a family reunion or holiday gathering. You might call a family meeting at your home one evening. Or you might put it all in a letter."

How do you decide who should know this? Of course, every friend and family member you have won't need to be informed. "What's critical to the success of your strategy is that you communicate with those who have an active relationship with you, who will have a future role in caring for the person with special needs, and who are most likely to provide personal or financial support to you," Hansen explains. "These are the people who need to know your strategy and who are most likely to unintentionally pull the thread to unravel your work if they aren't informed."

We've established a special needs trust

One element of a good financial strategy for a family with special needs is to establish a special needs trust (SNT). Tell your loved ones

why you have one. "It ensures that the person who benefits from the trust--your family member with special needs - will not be financially dependent on a future care-giver or guardian. Also, when the assets are owned by the trust, not by the person with special needs, it helps the person maintain eligibility for government benefits they're currently receiving or may need in the future," says Hansen.

If you've selected a friend or family member to be trustee of the SNT, obviously you've had conversations with that person, and he or she has agreed to take on the responsibility. Tell others who you've chosen and why. "It may be helpful to list the responsibilities the person will handle and what skills he or she brings to the job," suggests Hansen. "Some family members may feel slighted that you didn't turn to them for help, but upon learning the level of responsibility the job entails, may be relieved the task was given to someone else."

You may also want to let them know how a trust will be funded. Perhaps it's with a settlement from a lawsuit (for instance, from malpractice or an accident which caused an illness/medical condition or injury) or with assets on hand. Or it might be funded with proceeds from a life insurance policy or assets bequeathed through a will. If you want to protect government benefits the type of trust you choose depends on the source and nature of the assets funding it, and whether or not you want to protect eligibility for government benefits. This brings us to the next topic you'll want to discuss with family and friends.

If you want to help financially, here's how

"Let your loved ones know that you don't expect them to provide financial support," say Hansen, "but if they've thought about doing so, you'd like them to do it in a way that supports your strategy. …

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