Magazine article The Exceptional Parent

Good Planning Protects Benefits and Creates Assets

Magazine article The Exceptional Parent

Good Planning Protects Benefits and Creates Assets

Article excerpt

A friend walked in to my office one day. He carried a leather briefcase. He put his heavy brown case on my desk then paused with his fingers over the brass clasps. He smiled and looked at me. He waited for me to take the bait and ask, "What do you have in the briefcase?" Knowing him, it could have been anything --some kind of joke, a wild animal, lunch. Finally, I asked him to open the briefcase. He paused--again making me wait, then said:

"The contents of this briefcase show people how the work of a good team--you as the financial planner, an attorney and an accountant--can change people's lives. The contents show the value of benefits for people with intellectual and developmental disabilities. The contents represent the value of that work."

My mind was racing trying to think of the one thing that could help people the most that could be in the briefcase. Some legal documents? A lottery ticket? A time machine so I could predict the future? I had taken the bait and my mind raced from possibility to possibility. I gave up and asked him to open the briefcase.

With a flourish, he moved his hands over the clasps, popped them open and opened the briefcase. The image came straight out of a movie as I looked at row after row of neatly wrapped $100 bills. Each pile of bills was bound by a white band stamped with the number $10,000 on it. He said there was $1,000,000 in the briefcase.

My friend asked me if I had seen a million dollars before. I laughed and said no and that I was still waiting. The bills were fake. The planning concept he wanted people to understand, though, was not fake. There is tremendous value in preserving government benefits for our family members with disabilities. People that save and invest for the future can create wealth to supplement those benefits. Tax advantaged investing can increase returns by reducing tax consequences. The work of a good team can be valued in the millions of dollars for families with a special needs member if they take the right steps.

Families with a special needs member should take three major steps forward to preserve benefits and create resources to retire comfortably, pay for major life events for their children and pay for future special needs expenses: 1. Have an estate plan that includes a special needs trust, 2. Save and invest for future needs and, 3. Understand the tax benefits of certain types of retirement accounts.

To do this, a winning team needs to be established. This means finding a financial planner, a lawyer and an accountant each of whom understands the unique challenges and planning opportunities available to families like ours.


An adult with a qualified disability can access government benefit programs. The two primary programs for adults with developmental and intellectual disabilities are Supplemental Security Income (SSI) and Medicaid. SSI provides income. The monthly maximum Federal payment will be $735 for 2017 (some states supplement this amount) for a single individual. "Medicaid" represents many different programs. The two that matter most for adults with developmental disabilities are Medicaid paid health care and Comprehensive Services. Comprehensive Services can be supports to work or volunteer, housing options and other programs designed for the basics of life usually delivered by a nonprofit agency.

These programs can mean benefit values of tens of thousands of dollars per year. SSI at $735 per month means your family member receives $8,820 per year.

Medicaid benefits can be valued even higher. The health benefit of Medicaid means access to health insurance so our family members can visit doctors, get therapy and buy medication. Without Medicaid, there would be health insurance premiums, out of pocket costs and medical expenses. Premiums alone could be $500 per person per year and other costs could be in the thousands or more. Let's say health insurance and costs would be $1,000 per month. …

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