In today's episode, we are going to address a topic that I don't feel is addressed very much but affects many families in the United States and around the world.
You may have this need in your family, as well.
What we're talking about today is special needs planning. If you have someone in your life, whether that might be a relative close to you or a child of your own that has special needs, today's episode is something for you to consider.
We'll be talking about what to do from an investment standpoint in income planning, tax planning, and general financial planning.
As always, these are concepts and educational tools, and resources for you to begin the conversation. Now, if you know anyone who can benefit from this episode, please share, we would love for our podcast audience to continue to listen and grow from the education.
Southside Services - https://southsideservices.org/
Pacer - https://www.pacer.org/
American College of Planning - https://americancollegeplanningservice.com/
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Securities offered through LPL Financial, a member of FINRA/SIPC. Advisory services offered through Advisors' Pride, a SEC registered investment advisor. LPL Financial, Advisors' Pride, Forethought Planning and the guests of Thrive For[e]ward podcast are separate and unaffiliated parties. The views expressed here are those of the participants, and not those of Forethought Planning, Advisor's Pride, or LPL financial. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. LPL Financial and Forethought Planning do not offer legal services.
Shannon Foreman 0:00
Hello friends and welcome to today's episode of The Thrive Forward podcast. On today's episode, we are going to address a topic that I frankly don't feel like it's talked about very much but affects many families in the United States and around the world. And you may have this need in your family as well. What we're talking about today is around special needs planning. If you have someone in your life a loved one, whether that might be a relative close to you, a child of your own, whether young or grown, that has special needs. Today's episode is something for you to consider. We'll be talking about what do we do from an investment standpoint in income planning, tax planning, and general financial planning. As always, these are concepts and educational tools and resources for you to begin the conversation. Now, if you know anyone can benefit from this episode, please share, we would love for our podcast audience to continue to listen and grow from the education
Shannon Foreman 1:03
we provide. So let's press play. Well, hello there friends. Thank you again, for joining today's episode of the thread forward podcast. You see this topic around special needs planning is near and dear to our hearts at forethought planning. And part of that is something that we talk about with clients, whether it might be their grandchildren or their children who have needs that aren't always the same as every other child, their medical needs, their future needs of places to live, what they'll be able to do for work, it is a loaded bag of worms, or a big old backpack and a lot of what feels like heavy weight that parents of special needs children carry throughout their whole child's life. It doesn't end just like it might for some parents when our children turn 18. That being said, we want to break down a few topics and things that you should be considering when talking about with your family members. If you yourself, have a special needs child, or for those of you that have loved ones with special needs, there are special considerations that you want to make sure that you take into place. And the first place that I want everyone to start with from from a financial standpoint always is what are the wishes that you have for your children? What does that mean for a level of independence that they might need down the road that defines where they might be? From a housing perspective, once they reach adulthood? We want to truly understand what is it that you want for them, and what is it that they want and what is realistic for what they have the ability to be able to do. I like to think children and individuals with special needs have an extra special superpower that we as their caregivers just need to make sure that we cultivate and help them spread their wings and fly like they are destined to be. So we don't want to have them treated like they are a different member of our family. And sometimes that's harder for other loved ones to experience. But we want to make sure from a financial standpoint, and a life experience standpoint, that they have the same abilities. However, when it comes to finances, there are some things that we want to make sure that we have to treat a little bit differently. Let's jump into Okay, you want your child to live that same lifestyle, but they might be receiving some resources from state aid, government aid, any social security disability, there are going to be certain amounts of income thresholds that some individuals won't want to go past because then they might not be able to receive the same level of benefit in the future. We don't want them not to be able to have those benefits. So that's very important to what I kind of always bring into our financial planning discussions and especially applies here with a special needs family is making sure you have your personal board of directors in line, your attorney, your financial adviser, your tax planner, those are going to be three key individuals that you want to make sure that you they have a good understanding. Your financial advisor is going to help you understand what are the overall goals, what does that picture that you want that life to look like and then planning to make sure that you are saving enough to be able to help care for that child however long you might need to be able to financially provide for them. We know that medical expenses can be a huge part have that. And so we also want to take into context, what tax planning can we do for that, in 2022 7.5% of your adjusted gross income can be used for medical. So you have to be, your medical expenses have to be above and beyond that 7.5% of your adjusted gross income. And if I'm speaking a foreign language to you, when it comes to that, then please simply just lean into your tax professional and ask them, what is it that I need to spend through from a medical perspective so that you make sure that you're keeping adequate records, and then potentially being able to write off those deductions for yourself, again, personal scenarios, you want to make sure that you loop in your, your personal board of directors, the next piece, as you begin to paint this picture and put into action, the strategies and resources for your special needs child is really putting into play your legal documents. And I'm going to break down for you a couple that are very important, and some that you should be considering that might be a little bit different than what you would do in your own circumstances. So the first piece that you want to make sure that you establish is your estate planning documents. And what might be added to a regular Will Power of Attorney healthcare directive for yourself, would be likely a special needs trust. And that is a very specific kind of think of it as a basket, where are those investments that are geared towards your child with special needs would be titled, so then they would not in in hopes and in, you know, adequate planning, they wouldn't affect that income or those other resources that they might be receiving. So this is something that would shelter them from that case, again, always personal, want to make sure that you're meeting with the right people and putting the right place into action. The next piece is especially important as your child gains that legal age of 18 years old, where many children are very excited to say they're 18, and I'm an adult now, right? Well, those with special needs definitely need to make sure that you are applying for a guardianship, or a power of attorney to be able to handle and it will depend on again, what level of ability your child does have both cognitively and physically to be able to manage their medical, their financial, all of those types of decisions. So you'll want to make sure that you have the right legalese in place. And sometimes that might be a guardianship. Sometimes that might be a power of attorney, or a trustee of a special needs trust against getting with your estate planning attorney will definitely be an individual that will be able to help with you. Just like we don't want a brain surgeon to operate on our heart. We don't want just any attorney or even any estate planning attorney that doesn't have true experience in special needs to just be throwing out advice or legal documents, you really want to make sure that you're employing somebody that knows what they're doing. And so applying for and making sure your estate planning is order in order but also the estate planning of your special needs child by establishing a special needs trust, and making sure that you have any guardianship or Power of Attorney paperwork in order, especially once they become of legal age at 18 years old. I would also advocate for you and make sure that you understand what what is a letter of intent a letter of intent is showing this isn't necessarily a legal document, but it gives directions if something were to happen to you. What are the what are the actual schedules of your child on a daily, weekly, monthly basis? What are the things that your child likes and dislikes? What are some resources that are available? What are their physicians, therapists, other medical support individuals? What type of activities does your child enjoy being able to do? What shouldn't they be doing? And making sure that you have a copy of that just in case something were to be able, you know, something happened to you and you were not able to care for your child anymore. Oftentimes we do the legal side of things. But we don't necessarily give those inherent directions to ourselves. That only we might know. And if we weren't there, we would want to make sure that they were still cared for in the same Avenue. Then again, depending on your child's level of cognitive or physical ability when they become a teenager. It's okay to start educating them about money and telling them the reasons why you're making different decisions. means you're also being able to get them ready if they are going to have a level of some independence, whether they might be placed in a group home as an adult, or they're going to have other elements of being able to live outside independently with some level of support system. What are they going to be doing in
Shannon Foreman 10:19
school are they going to be going to school explaining those things, especially if they're going out to get a job, too, we want to help them understand, just like any other child, how to make financial decisions, but even more so how to make financial decisions that are right for them, and the resources that they are receiving. Again, our children are all incredibly talented individuals, and able to understand more than we think that we can. And so again, you know your child best what is enough and what isn't, is too much and taking things at certain time periods depending on how much they're able to digest in one period of time. We are going to pause and this conversation around special needs planning. If you find yourself in this conversation, knowing that this is a topic that is impactful to yourself or a family member, and you think it is time to start the process around planning further, we would be thrilled and honored to support you in this journey at forethought planning, we would love for you to take the next step in scheduling your wealth assessment with us today. So 30 minute complimentary get to know you session, understanding where you are, what you're seeking partnership in, what you're looking for in that partner, and what services we may have that align with you, no hard sales pitches, no sales products, nothing simply getting to know each other, and then moving through with the financial planning process. If it works for everyone, what do you have to lose? Let's start the process together today, simply go to forethought planning.com backslash wealth assessment today. The last piece that I want to make sure that we touch on is just from an investment standpoint, again, investing in something that is personal to you and your family, and especially to your individual circumstances. So you want to make sure that you loop in your financial advisor, and make sure that they are aware that you have a special needs family member, whether it be a child or grandchild, and they're helping direct you in the right way with the right type of investments. There are investments that could produce income that could be taxable, if not placed in the right type of legal ownership like in a special needs trust. If your child is a beneficiary on an asset and you haven't changed those, you want to make sure you do that. There are also other investment vehicles out there through the ABLE Act, the 529 ABLE account has been established where you have the ability to add $15,000 into an account for a special needs child every year. And so making sure that you work with your financial planner, and your tax professional to understand how you personally can benefit from providing some of these tools and resources for your family. I know that financial pressures can be a lot for families who are experiencing different levels of struggle for their special needs children, medical bills, therapy, bills, emotional
Shannon Foreman 13:38
adjusting to things for your children, as well as your family members or other children that you have. There are so many different resources out there. And we're going to put some of them in our show notes and on our blog. But locally here in the Twin Cities, we've got some great resources through Southside services, which is the nonprofit we supported through our financial wealth circles. They are someone an organization that someone in organization that helps individuals with special needs be placed for jobs. And so again, as you're entering those areas, if that's an opportunity for you. Pacer is another phenomenal organization with lots of different resources out there and a nonprofit. I will also say that there is specifically on the American College of planning, we'll link some articles that get a little bit more specific on some things that you should consider from a tax planning, financial planning and estate planning, especially around those inheritance and gifting things that you want to make sure especially if you're a grandparent that you're understanding what how those gifts might not want to be received or how should they be received from a tax planning perspective? Just in recap of everything. As always, things are very important to be done. specific to just you and your family. Don't think that just because one person does it, you should do it too. So again, involve your personal board of directors specifically or estate planning attorney, your financial advisor and your CPA or your tax accountant, you want to make sure all three of those parties are working in your favor. So make sure that you connect to those and you know who's the lead person is within the three of them that can get everybody together to advocate on your behalf? Secondly, make sure that you're getting your legal documents in order, understanding those needs and what that overall vision plays a part adding the legal documents for those working with your CPA understanding how can you save into an ABLE account? What type of medical expenses can you write off? What are what is available to you from a tax reduction standpoint, also understanding what is the income threshold for my child not to be able to receive the benefits that they are due in the future. And lastly, making sure that you're working with your financial advisor and not having any investments spin into a scenario where they could be creating an economic inefficiency for yourself for your family, and especially your special needs child. Of course, if you are interested in finding out more information, please visit our website and we'll link that in the show notes below where we'll offer more resources for you on special needs planning. Ultimately, I want you to understand my dear friend, you are listening to this episode because someone in your life might have special needs, whether it's your grandchild, or your child yourself. You are a rock star, there is parenting and then there is parenting of a special needs child. I commend all of you for the hard work, the dedication, the Endless Love, the sleepless nights and everything. I want you to know that at the end of the day, you are worthy of all of this worthy of being able to plan for yourself and for your child. So please remember, you are worthy of wealth. The views expressed here are those of the participants and not those of forethought planning advisors pide, or LPL. Financial all investing involves risk including loss of principal no strategy assures success or protects against loss securities are offered through LPL Financial and member of FINRA and SIPC advisory services offered through advisors pride and SEC registered investment advisor LPL Financial Advisors pride forethought planning and the guests of the Thrive Forward podcast are separate and unaffiliated parties