When it comes to clients with special needs children, Uncle Sam may be a financial advisor’s best friend, according to Rob Wrubel, a senior vice president with Cascade Investment Group in Colorado Springs, Colo.

“Many special needs children are living longer than they used to,” Wrubel said. “Those children will likely not become financially independent, so families have to plan for them to live with their family into adulthood.”

Government benefits are a crucial cornerstone of financial planning for families with a special needs child, he noted, adding that he learned that lesson the hard way from personal experience.

Two decades ago, he was a newly-licensed insurance agent with a new-born son. Eighteen months later, in 2003, Wrubel and his wife were blessed again, this time with a daughter. Unlike his first child, however, his second arrived with unforeseen medical complications.

“My son was a typical kid and didn’t have any special needs, but my daughter had Down’s Syndrome,” he said.

Wrubel said that after his newborn daughter remained hospitalized six weeks after her birth, he realized how valuable information could be that helped a young and growing family like his cope with the unexpected expense of a special needs child, but he struggled to get it from government bureaucrats at a Social Security office.

“The experience was not good,” he said. “The person I saw could not explain the benefits and it was an extremely disheartening experience. I believed I could learn more on my own by speaking to attorneys and by reading so I could understand how the benefit programs worked from a long-range benefits-planning perspective.”

Wrubel, a financial advisor transplanted from New Jersey to Colorado, now helps other families plan for the unexpected.

Wrubel said he often gets client referrals from CPAs or lawyers, but also through internet searches by parents desperate to find a financial planner familiar with their concerns.

“When I first meet with a family that has a special needs child, I help them by planning a long-term care financial plan,” he said. “I use the theme of building a house because people get it. It’s a starting point.”

More often than not, Wrubel’s first suggestion is that his client set up a special needs trust for their special needs child.

“A person can’t qualify for SSI (Supplemental Security Income) if they have more than $2,000 in accountable resources —anything that’s for investment purposes,” he said. “Most families that come to talk to me have retirement accounts, etc., so a special needs trust allows me to put accountable resources towards [their special needs child].”

Wrubel said that parents of special needs children also tend to have emergency funds larger than those of families without a special needs child in order to afford the cost of medical services and equipment, education, diet and clothing.

“I recommend an emergency fund of about six months of salary, if they can get there,” he said. “I also like for people to have term life insurance in place.”

Wrubel said he recommends a third component to building a financial plan for families of special needs kids—an ABLE account.

ABLE accounts are tax-advantaged savings accounts for individuals with disabilities and their families. They were created under the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014, better known as the ABLE Act. 

The beneficiary of the ABLE account is the account owner, and income earned by the account will not be taxed. The account beneficiary, family, friends, Special Needs Trust or Pooled Trust can all make contributions to the ABLE account, but each contribution must be made using post-tax dollars and will not be tax deductible for purposes of federal taxes. However, some states may allow for state income tax deductions for contributions made to an ABLE account.

Wrubel said that an ABLE account is not always a perfect solution to financing the care of a special needs child.

“Once ABLE has $100,000 in it, the client will lose their SSI, but not their Medicaid,” he said.

Wrubel said it is just as important for families of special needs children to put aside money for their own retirement account as it is for them to save for their special needs child.

“My approach is always holistic; I’m concerned with everyone in the family,” he noted.

Every year, he said, he makes it a point to have a yearly conversation with his clients to better assess their current financial status and to see if they can’t finance areas important to everyone, such as planning a family trip, particularly if the money is there and is not needed by the special needs child because they have access to government funding.

“My feeling as a planner is that we have one life to live and we should enjoy it,” he said. “When somebody comes in for one meeting, its a good feeling when that person leaves with a better financial plan than they had when they entered.”

Wrubel is the author of “Protect Your Family,” and “Financial Freedom for Special Needs Families: 9 Building Blocks to Reduce Stress, Preserve Benefits, and Create a Fulfilling Future,” both available on Amazon in print and digital format.