“The confusion associated with giving care to individuals with special needs can be overwhelming,” according to Marc C. Shaffer, a CFP in Overland, Kansas.
Shaffer says his advisory firm employs a team approach. This includes using all community resources, exploring special needs trust and asset protection strategies, as well as informing all family members of the needs of the disabled child. And, adds Shaffer, “planning for the child’s independence.”
Various kinds of trusts, Singer adds, are essential weapons in creating an income stream that will help the special needs client over the course of a long life.
Although there are many government programs that can help, he adds. For example, the disabled adult who can’t work can qualify for Social Security and Medicaid at an early age as well various government housing and therapy programs, Singer says.
But Singer, who argues that advisors seeking this kind of business, should consider an alliance with an attorney, says a key issue of this business is how does one generate lifetime income for the special needs’ clients after the parents and other family members are dead.
He says the basic planning for many clients is to set up a special needs trust. It should be set up, he adds, in such a way that the government doesn’t treat it as an entity to be taxed.
“In your trust, you can name a disabled person as a beneficiary. It can be set up in a way that the government doesn’t treat that as an asset,” he says.
This, Singer adds, is a much more effective strategy than disinheriting the special needs client and leaving assets to a sibling who will take care of the client. The sibling could die before the special needs client and “then what happens,” he asks.
Another issue that favors using trusts, Singer says is that those who inherit assets don’t always carry out the wishes of the parents.
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