The coronavirus pandemic provides an opportunity for financial advisors to help with the current situation and to prompt families to plan for the next emergency that will strike in the future, said Matt Stagner, senior special needs financial consultant for Voya Cares at Voya Financial Advisors. 

The financial and health needs of people with disabilities are being exacerbated by the pandemic, and people with special needs are experiencing more disruption and less certainty than the general population, said Stagner.

“The current crisis highlights the need for planning for the next thing that will happen,” Stagner said. “People with special needs and disabilities are being hit harder than the community at large by the pandemic. They are more likely to lose their jobs and to not know if those jobs will come back. It is harder for them to save” even in good times.

But there are solutions available. A financial advisor who wants to serve the special needs community needs to know the programs that can help, he said.

One tool is an ABLE account, a tax deferred account that can be used for a broad array of expenses for people with disabilities. An ABLE account, which was authorized under the same tax code as 529 education accounts, “opens up an avenue for people with disabilities and their families to save. The accounts have been available for several years and are slowly gaining recognition,” he added.
 
Another tool is the special needs trust, which can be used for expenses for people with disabilities. The money is under the control of a trustee. There is no limit on the amount that can be placed in the trust or distributed from it.

Government programs such as Medicaid and Supplemental Security Income (SSI) have income limits to determine who is eligible. Money placed in ABLE accounts and special needs trusts do not count in determining the eligibility.

“The two types of accounts supplement each other and for a lot of clients we recommend they have both,” Stagner said. For clients with special needs, benefits provided by employers that apply to everyone are even more important. “The job of the advisor is show how these benefits fit the particular situation.”

Some people with special needs are left out of assistance such as the stimulus checks provided under the CARES Act. If an adult is claimed as a dependent for income tax purposes, he or she is not eligible for a $1,200 stimulus check or $500 as a dependent, but pending legislation could change that.

For an advisor who wants to work in the special needs community, “it is important that you come from a place that is genuine – that you want to make a difference.”

Advisors can earn specific designations, such as the Chartered Special Needs Consultant, but much of the knowledge needed to serve the special needs community comes from handling a lot of cases, Stagner said. “You need to get involved with the special needs community to gain credibility.”