The Post Secondary Transition Conversation
The ONLY podcast to talk about the ins and outs (and everything in between) of the secondary transition process for families of students with disabilities! Hosts Meghan (Smallwood) and Patrick (Cadigan) serve as supportive guides, leading families step-by-step up each rung of the transition ladder.
Also check out our parent website: https://www.postsecondarytransition.com
The Post Secondary Transition Conversation
107. Special Needs Financial Planning with Betsy Larson_Full Discussion
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Hosts Meghan (Smallwood) and Patrick (Cadigan) are joined by special needs financial planner Betsy Larson for a discussion on financial and estate planning for families of individuals with disabilities. Betsy explains the importance of planning for a "three-person" retirement, using tax-efficient strategies, trusts, ABLE accounts, and her "bucket plan" to provide long-term financial security while avoiding common planning mistakes. She also discusses individualized approaches to guardianship, the value of a detailed letter of intent, the role of corporate trustees, and the importance of keeping estate plans up to date to ensure continuity of care. Join the conversation!
Episode Keywords:
Special needs, special needs planning, financial planning, financial planner, three-person retirement, government benefits, Medicaid, SSI, SSDI, bucket plan, now bucket, preservation bucket, distribution bucket, special needs trust, ABLE account, tax management, inheritance, estate planning, legacy planning, guardianship, supported decision making, letter of intent, transition process, corporate trustee, housing options, emotional support.
Links:
Special Needs Advanced Planning (link)
YouTube Channel (link)
Podshare - Six Pillars of Financial Planning (link)
Ep. 70 ABLE Accounts vs Special Needs Trust (link)
Ep. 92 Interview: Kelly Nelson & Understanding ABLE Accounts (link)
To download a copy of a transcript for this episode or any of our previous conversations, click here.
Also visit our Podcast webpage to find links to all of our other discussions; go to www.p2transition.com.
Additional information about post-secondary transition can be found at our website.
The Post-Secondary Transition Podcast Facebook page.
Visit our YouTube Channel to find additional video resources.
Intro/Outro and Ad Music by Oleksandr Stepanov & AudioCoffee from Pixabay.
Transition music by Joseph McDade from Transistor.
Intro
SPEAKER_03Welcome. This is the Post Secondary Transition Conversation. We focus on the ins and outs and everything in between of the transition process for families of students with disabilities. I am one of the hosts. My name is Patrick Cadigan. I am a public school transition coordinator. As always, I have a co-host and who would that be?
SPEAKER_00I am Megan Smollett, and I am also a public school transition coordinator.
Betsy Larson
SPEAKER_00Well, today we have Betsy Larson with us. Thank you for joining us, Betsy. Yeah, thanks for having me.
unknownOh, sorry.
SPEAKER_00Yeah, go ahead. No, I was going to say Patrick was the one who reached out and made the connection. So I was going to let you share how that went.
SPEAKER_03Betsy, the reason that we wanted to have you on today was a little bit of your background. You are a financial planner, but not only a financial planner, but a financial planner for families of people with special needs. Did you did you want to talk a little bit about that and what that looks like?
SPEAKER_01Yeah, yeah. So basically I work with people who I kind of say that they we need to plan for a three-person retirement because sometimes people kind of look at special needs planning and they will kind of think, I'm just planning for my child. Like, just what do I need to do for my child? That's all that they really think about. But I say, no, we need to make sure that you're also enjoying your life and that you work so hard to be able to enjoy your retirement and achieve all the goals that you've set out to achieve. So let's make sure that that can happen while we're also planning for your sibling or child with a disability. So that's really where I lies.
SPEAKER_03So needless to say, it's A, very specific, and then B, we would consider it to be fairly niche. So what drew you into special needs financial planning? Is there a personal experience that shaped your approach?
SPEAKER_01Yeah, so I actually have four little sisters with Down syndrome that I that have really become like the the core of my life. Like I've got a daughter too, and I and I obviously I adore her, but my sisters are everything to me. So I always knew that I wanted to go into something related to the disability. And it just so happens that my dad is a financial advisor and has been my whole entire life. So he actually, about seven years ago now, asked me to join his practice. And I was coming in basically nothing. I had worked for a manufacturing company for like eight years prior. It was nothing that I wanted to do, but it was just paying the bills. And so my dad had me come on and I was starting to run the business a little bit. And then I was talking to a friend of mine who has a son with pretty severe disabilities. And he, and she was just telling me, she's like, I don't even know what to do. So I just started to kind of look into it and realize it was a really, really underserved community of people that government benefits and all of the planning that's around having a loved one with a disability is just some so much bigger than what most financial advisors are are planning for or even just know about. So I really took it upon myself to really get a good education and understanding of what needs to happen and what needs to be planned for for these families. So it all started with my sisters, and then it just sort of evolved into me turning into this special needs financial advisor.
SPEAKER_00I love that because I I can totally relate. That's where I have a sister with a disability, and that's why I went into the field of special ed. So it's always like near and dear to your heart, and how can you support those families after you've experienced what they're going through as well?
SPEAKER_01Exactly. Yeah.
Buckets for now, soon and later
SPEAKER_03One of the ways that we managed to hook up with Betsy was longtime listeners will know that we do out what we refer to as pod chairs, and that's when Megan and I cannot for one reason or another, we couldn't do a recording. And we had found Betsy's content on YouTube, and one of the videos that struck us was the six pillars of financial planning. As we were watching that video, that's a you describe financial planning as a bucket plan with now, soon, and later buckets. Can you break down what that looks like for a family who's just now beginning on this journey?
SPEAKER_01So basically, when it comes to the bucket plan, I a lot of times when people are thinking about their money, they're thinking about, okay, I'm in my working years, I'm accumulating my money, and then once I retire, that's kind of my distribution phase. That's when I need to start tapping into that money I've been saving for so long. The way that I like to think about it is sort of accumulation, preservation, and then distribution phase. So with the now bucket, that's the money that's going to be what you need to live on now. So whether whether you're working now or you're or you're retired and you're and you're having to actually take money from your the assets that you've saved so far, the now money is going to be money that you need for like this year, whether that's from income or or your accounts. The money that I see in this preservation bucket, which I think is really important that we see it as that, is it's gonna be safer money. This is gonna be money that's going to be that we're we're still investing it and we're still making sure that it's doing something for you, but it's going to be a lot more, a lot safer. So it's not gonna have those large market swings like maybe your later money would have. Because you're gonna be having to take money out of these accounts sooner rather than later, we we don't want it to be as susceptible or as as in the market or as susceptible to market fluctuations as the later bucket, because when you're taking money out, say that you need to take out $10,000 and it's a down market that day, it's a lot harder to recapture those earnings when you're having to take money from a from a negative, you know, market day rather than if if you're taking it from money that we is pretty safe and secure. So what we like to do is we like to say, okay, you need this money for this year, that's your now bucket. We and then we need about this much money. We we project all of this, all of your costs and things like that for basically the rest of your life. And this thing, these are all, these all are fluctuating numbers because life changes and things happen. But we we project what you're gonna need for the next 10 years and we say, okay, we're gonna have, we're gonna say that this money's gonna be a little bit more conservative. It'll still do something for you, but it's gonna be more conservative. And then anything left over, we're gonna have the market do its thing with it. We're gonna we're gonna let it run and we're not gonna care if the market's going up and down because we don't need this money for over 10 years. And then the way that I like to do that is uh so I do it in a couple of different ways with my clients. Sometimes I do it for, you know, people want projections for just their children. So what we'll say, we'll say, okay, this is what their income is. So that whether it's their social security or their SSDI payments, things like that. And then we project how much they're going to have to be living on. So we know exactly, so I can project about how much we need to have for that child. Some people want to do it for the whole family. So I I prefer to do it for the whole family because oftentimes it is the parents who are going to be having to pay out of their pocket a lot of uh, you know, often for their children with disabilities. So I will take the whole family's income, the whole family's expenses, and then we will start to bucket that money. And then a lot of times that later money, we're going to use that for legacy planning. So that go into a special needs trust. Now, once once the special needs trust is actually going to be starting distributions, that's when we start to bucket that as well. So there's a lot of different buckets, but it all kind of means the same thing. You know, even especially when when it comes to a special needs trust, we will really want to bucket that money because we really want to make sure that that money is preserved for as long as possible. So knowing that you keep the now money, the money that you're gonna need this this year, basically in cash, you know, because you don't want that to fluctuate at all. The 10-year money, we keep that a little bit safer, but at least speeding inflation. And then the later money can be a little bit more risky to not not super risky. It is a special needs trust. We need to be we need to be careful with it, but it can be a little bit more aggressive so that it's working harder and can last as long as possible for the family.
SPEAKER_00I think that's important for families to consider because I know we have state funding for those with disabilities here for lifelong services. They have SSI. And then a lot of families are like, well, we don't have to worry about employment. They're not getting a job, they're not getting a paycheck, but you do have to consider how to, like you said, put the money in buckets to think about the long-term plans. Because I know how how scary it is to think about what's going to happen when you're not around anymore, but it is a conversation that needs to occur, and you need to be prepared, you know, in case something happens and in case that state funding, the way things are going, is not stretching as much as it can.
SPEAKER_01So I mean, these families know too that state funding does uh does the bare minimum. You know, if you want to be able to live uh any big quality of life, you want to try to plan for those assets for as long as possible.
SPEAKER_00Exactly.
Avoiding mistakes
SPEAKER_03We have had so many conversations. Um Megan and I have been doing this for a couple of years, and one of the things that we had noticed as far as the trend in the data of our discussions was is that when we would talk about the financial side of things or financial pieces, our numbers would go up. So we know that it's an it can be an overwhelming piece for families and it can worry them quite a bit. So what are some of the biggest mistakes or or blind spots, if you will, that you see families make early on? And then how do you, as a financial planner, how do you encourage families to avoid those blind spots, those mistakes?
SPEAKER_01Yeah, so I think that one of the one of the biggest things that I that I see is people saying, like, I don't have enough planning, I don't need to do planning. I have nothing to plan for or plan with. That's that's a a giant mistake on a lot of people's parts because no matter what you have, we need to be making sure that government benefits are preserved, that whatever you do have is not, you know, we need to be checking beneficiaries. Because even if you have a you know a $10,000 IRA or 401k and you leave that to your child with a disability that who relies on those government benefits, that can wash it all away and basically start from scratch if if we can get that into a first party specialties trust. It just can get far more complicated. So first mistake is doing nothing. Second mistake I would say is like I just said, like leaving a direct investment to your loved one with a with a disability that does rely on those government benefits. You know, oftentimes people will either, they'll either, I guess there's two ways they go about it. They either leave all of the money to that child because they want to make sure that they're taken care of. You know, it's it's all with really good intentions. It I don't think that they they clearly don't mean anything bad by it, but the planning will allow for those government benefits to stay and them to have those that money that you worked so hard for for them. And another thing that I have seen people do is completely disinheriting their child and saying, okay, I'm gonna leave everything to their sibling and their sibling will take care of them. And that can be a big problem because what if that sibling, okay, first of all, what if a sibling just decides they can't and won't do it? It just is a it's too much for them. What if they get married and then divorced now that money is going to be possibly lost in a divorce settlement? What if they have creditor issues and then the creditors come take that money? There's just a lot that can go wrong there. What if that sibling passes away and they didn't leave especially stressed as the beneficiary? You know, there's just there's so many things that can go wrong. So just sitting down with an advisor who knows this area and just having, even if it's just a conversation, even if you're like, you know what, I I don't I don't know if I can go, you know, if I can go too deep into this right now, but I at least want to have a conversation to get my mind going. Just have that conversation. You know, often there's a plenty of us who will do consultations for free. Like I will do, you know, I normally do a 20-minute conversation because I get to know someone, and then I'll do a whole hour long where I look at everything and I kind of just give them an idea of what might need to be done. And I do that complimentary. So, but just at least sitting down and getting some information from somebody so that you can start to get those those wheels rolling, you know, get the ball rolling and to start planning for your child. That's a that's a big one.
SPEAKER_00You brought up exactly what I've heard families say before. Oh, I'll just leave it to the sibling. That'll protect them.
SPEAKER_01And I'm like, uh, then maybe you should talk to somebody about that. Well, and that's a that's another big thing is not having a conversation with your whole family about the planning that you're doing. Because I've had people that have come to me, they're like, oh yeah, we have their sibling as the successor guardian, but the sibling doesn't even know. Like they haven't had that conversation. Or the sibling is the trustee, but they don't know trust rules. They they don't know who to come to once that once they do become the the trustee of that special needs trust. So yeah, having those family conversations for those reasons and also so that if a grandparent wants to leave money to the child, they know, okay, we need to leave to the special needs trust. So that's another important part of the planning process is having that family meeting so that everybody's on the same page. Everybody knows what's going on.
SPEAKER_00You bring up a great point because I know I've talked to families before. And I feel like as a sibling, like you're kind of put in a hard spot because of course you want to take care of your sibling, but it's you're not always included in these discussions or conversations. I know I wasn't when I was younger. So it's like you're playing catch up. So I always tell families like, please make sure you're involving the sibling in every discussion, whether it be they're preparing to leave school, the school system, when they're deciding on a placement, keep them involved and knowing who's a provider, who's this coordinator, and then obviously the financial part and the guardianship, the legal part. But also it's just so important that the parents recognize, like everyone in the family, like you said, if grandparents want to leave an inheritance, that they realize like how they go about doing that, because I've seen families where the child was held up by receiving Medicaid because they got an inheritance from the grandparents and it just sat in his bank account for for a long time, not realizing what it was costing.
SPEAKER_01Again, I think I think it's always important on to reiterate that we understand that these are not ill-intentioned inheritances. They wanna they want to help. It's just us educating them on the best way to help.
Tax management
SPEAKER_00Yes, it's definitely the education piece. You don't know what you don't know, and this is a very daunting area. And I know Patrick, you had also mentioned something earlier about like taxes. Like a lot of families have asked me in terms of like all this, the trusts and the money for their child, how does that play into like tax management for them? And I don't know, Betsy, do you know? Are there any like specific strategies or benefits that they commonly miss or should know about from the beginning as they're going through this process?
SPEAKER_01Yeah, I mean, taxes are are massive, especially when we talk about special needs trusts. I mean, trusts are taxed, the the income in a trust is taxed way higher than normal what our ordinary income tax rates would be. So, like, for example, in order to be in the 30, 37% tax rate for just your ordinary income, you have to make like $768,000. I think it's like $768,7 to be taxed at 37%. To be at the 30%, 37% tax bracket for trust income, it has to be $16,000. Like it's like it's it's so, it's like nothing, basically. So what's important is that you when we're looking at what to put into a special needs trust, is we have to look at what's going to be most tax efficient because taxes can eat up a trust real, real quickly. So, I mean, I mean, maybe just in my field, I think that it's like said all the time, but life insurance is going to be one of the best things you can possibly put into a special needs trust because it's going to be tax-free. Um, it's it's immediately put into the trust, it's immediately funded. It is, I guess, upon the passing of the person who was insured. But that's going to be like the easiest, most tax-efficient thing to put into a trust. Um and then we if they don't have life insurance or if they want to, if they have additional assets to put in there, we need to be looking at it throughout those parents' lifetimes or whoever's going to be putting it into the trust upon their death to make sure that we are uh, you know, whether it's doing Roth conversions so that there's a lot more Roth money in there than IRA money or having non-qualified assets in there, like like individual accounts, bank accounts, things like that, but having them structured in a way where they're not gonna have a ton of capital gains that would cause taxation inside of the trust. Things like that. Speaking outside of the trust, there are a couple of really great tax advantage accounts like the ABLE account. I'm sure that you guys know all about the Able account. That's a great account because it it doesn't impact their their government benefits until there's over $100,000 inside of the account. It grows tax-free and it's distributed tax-free as long as it's for a qualified disability expense. And I, you know, I think that the IRS made a qualified disability expense pretty vague on purpose because they want them to be able to spend the money. Basically, anything that that is spent for a person with a disability is going to be a qualified disability expense, which I which I love. So yeah, I'm a huge proponent of the Able account. I think they work really well in tandem with the special needs trust. I don't think it's one or the other. I think it's both. And yeah, those are just some tax ideas for that I always bring up when I'm doing my planning.
SPEAKER_00Yeah, we've had some good conversations about able account and the importance of like you don't have to choose able account or special needs trust. You can have both.
SPEAKER_01Yeah. I mean, what I love is so I'm a I'm a huge proponent of giving everybody more independence, right? Whether you have a disability or not, we all want to be independent. So what I like to see people do is because of the Able account, I don't like to have too much money in an Able account just because there's that Medicaid payback provision once that person passes away. Um, so what I like to say is, okay, take that special needs trust. Hopefully it's a third party so that it it can, it doesn't have that Medicaid clawback. And then just put some money into the Able account from the special needs trust so they can go out and spend some money. They can go to the movies or do something, just do something for themselves. Right. And just have that little bit of independence. Use their little fast link card. And I think that that makes a huge difference for a lot of people and they can pay for something themselves.
SPEAKER_03For sure. Hey listeners, we thought that this would be a good place to pause the discussion, but make sure you come back in two weeks' time because Betsy has more to talk with us about. She's gonna talk with us about how she sees guardianship, share some information about letter of intent, legacy planning, and much more. So we'll plan to see you back here in two weeks' time.
Thoughts on Guardianship
SPEAKER_03And then as I'm hearing you talk about all of this, and this is kind of changing lanes just a little bit, however, I do feel like it segues into a discussion around guardianship, which can be emotional or complicated topic for families. Do you help families decide whether guardianship is appropriate versus the alternatives from a financial perspective?
SPEAKER_01I can. I say that that's far more of a so I okay, we have these conversations, and it's not always an easy conversation. I definitely am not a one size fits all type person. I don't think that everybody needs to have a guardianship, and I don't think that nobody needs to have a guardianship. Yeah. I think that it really is going to depend on every single individual person. It can be a financial, I mean, I'll definitely bring up the financial side of it. Like, are they a spendthrift? Could they easily be taken advantage of? And then that money and then any money that they have is swept away because somebody was like, I want to be your friend if you buy me a PlayStation. So things like that. So we have those conversations about what they say it's we're doing parents to child. We have those conversations about what they believe that their child can handle. And I like to bring as often as possible, I do like to bring on the person that we're actually planning for because this is their life, you know, and kind of get their their idea too, if they're capable of it. And some people, some people just that's not going to be possible for them, and some people it will. So I do love the the supportive decision making option where they are far more involved in all the decisions that are being made for them, but they have this trusted group of people that are making those decisions along with them. But again, that isn't always that isn't always going to be the best, the best route. Sometimes guardianship just is the best option.
SPEAKER_00Yeah. That's what we definitely tell parents all the options. And I know it's hard because it's they want to know, well, what do you think? Like, I can't make that answer or that that decision for you. It has to be based on what works best for your family.
Letter of Intent
SPEAKER_00Regardless of it's guardianship or an alternative, I know the letter of intent is very important, you know, and just explaining what the individual details about what people should know. Do you have any suggestions as like what professionals might need to know within that?
SPEAKER_01Yeah. So the letter of intent is basically this massive document that tells you everything that a person needs to know about the individual with a disability. So I like to talk. Tell parents that it is going to make the time of transition, which is already going to be a really difficult time, easier. It will still be difficult, whether it's because the parents passed away or just that they're moving into a new place or their lives are changing. It's going to be a difficult time. But this letter of intent, this is going to be a document that has all of the financial details, all of their medical details, all of their, all of the resources that they currently utilize. But more important, I think, is it gives you information about really core information about that person that maybe parents, only parents know. I'll just tell you a small little example is my sister. So she has Down syndrome and autism. She can have a really bad day if just her sock seam is off. So that's something that they have in their letter of intent. I mean, I'm gonna, I'm her successor guardian, so I already know this about her. But in their letter of intent, they have if Rosie seems to be having a meltdown, check her sock. And then that could make or break a day. Yeah. Honestly, she doesn't wear socks very often at all. But it has like all of that really like nitty-gritty information that whoever who so whoever the next caregiver is going to be, they know how to best care for your child. Yeah. That you it's all the information that only a parent would know on a document. And a lot of parents are really, really intimidated by it because it's a lot of information. And I always just tell them, how do you eat an elephant one bite at a time? Like just little chunks. Just sit down for 10 minutes. That's all you have to do. Or, you know, if it's easier for you to say, I'm gonna sit down for 10 minutes and do as much as I can, or I'm gonna do one page, just choose something that you know that you'll do and just do it. Because something is better than nothing. And then that's something that, you know, on a yearly basis, we will review it just to make sure there hasn't been any changes. It's usually a pretty quick process to review that, but it is important to review it because life does change and people change and resources change and all that stuff. So you want to make sure it's up to date.
SPEAKER_00Yeah, I've encouraged families, you know, even as young as 16 as they're starting to think ahead to the future, just start putting things together. I said it's kind of like when you go out for the night on a date night and you have a babysitter coming in. You need to have that place that they can go to find all the important information, the phone numbers. But this becomes like a handbook to understand your young adult, so that if God forbid you weren't there, someone could walk right in and pick it up and life can go on seamlessly. And like you said, it's all those little things that no one else might know, but it's important to them. So yeah, it's it's very important.
SPEAKER_03In regards to the letter of intent, do you have a format that you follow, or does it really depend on the individual that that letter is being written for?
SPEAKER_01So I definitely have a template because I don't want people to miss anything. You know, they might write down all the things they know about their child, but forget that you also want to say, okay, they go to this church every Sunday at this time. Something like that. Like all these different things are, or they they go bowling every Wednesday with these people. Yes. Or, you know, who their doctors are, what medications they're on, all of that stuff. So I do have a template, and then some things are gonna be we we don't fill it out because it's not applicable. Yeah, I usually just give everybody the template that I have.
Pease Consider Support
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Legacy Planning
SPEAKER_03Well, in all of that, it's funny because as you're talking about like the individual and we're hearing all those individual stories and like all those little, those nitty, gritty details. It's I remember in a previous conversation that we had had, it was talking about legacy planning, knowing those details, knowing what to bring up, knowing what to write down. Legacy planning can be pretty emotional. I had told Megan recently in a conversation that we had had that kind of hovered around this that my wife and I had sat down to do our planning, and we have two neurotypical children. Speaking with a lawyer about that, and kind of like what you were saying before about this building things out and asking questions and having this conversation. How do you guide families planning for a future where they're not gonna be there anymore?
SPEAKER_01Yeah, I mean, it can get very emotional. So oftentimes when an advisor comes to me and says that they're curious about getting into this field or niche or whatever you want to call it, I just say you have to be very compassionate and very understanding and very empathetic. I have oftentimes I have people come to me when we start these conversations, they break down and you just have to sit with them in it. They're allowed to feel their feelings. I'm not gonna try to pull them out of it because it is an emotional, really heavy, heavy topic. I mean, I have I have a daughter too, with the thought of me not being here to see her get married or to see her go on and do these things, it it makes my my chest tighten up. So these very real conversations that we're having with these families who likely they will have to, I guess when you think about like a toddler versus like an adult child, you are so much more protective of that toddler because you know that they're gonna they could potentially hurt themselves. Yeah. I think that these families that have children with disabilities are constantly in this protective mode. The thought of them not being there to protect them is terrifying to them. So I think just walking them through it and being really, really okay with it taking time and you just sitting there and in it with them while they think about these things, you eventually get through it, but it it does take some time. And I and I just reassure them that it's okay. You go feel what you're feeling. It's okay. I'm here, I I've got the questions, I'm ready whenever you're ready. I hope that answers your question.
SPEAKER_00Yeah, well, and I think you you kind of answered the next question we had about like protection planning for those what ifs, like and the conversations that families want to avoid, but they really do need to address sooner than later. I think planning out who's going to fill those shoes, what it's gonna
Other Conversations
SPEAKER_00look like. Is there any other conversation you think parents really or families try to avoid when you're talking with them?
SPEAKER_01I actually have a client who is at she's a sibling actually, and she uh she's sort of taking the head and making her parents do the planning for her for her sister who has Down syndrome. And the parents have been very reluctant. And it makes because it just it just feels like it's too heavy of a topic for them. Like we don't, you don't have enough, and she's just gonna live with me forever, and everything's gonna just everything's gonna stay the same. And the sister's like, no, we need to start planning for if it if things don't stay the same. Sometimes it's not even avoiding, it's just not knowing that the things that they need to be thinking about. We mentioned it before. Some people do avoid having those conversations with their families. You're going to be the successor guardian, you're gonna be the trustee of the of the special needs trust. And then when their parents pass away, then it's all thrust upon them and they're like, I don't even know what to do. They might even get too scared and say, I'm not doing it. And then that can be a whole thing. So I think having those conversations with the family is going to be really important. I think that it's also really important to say we're talking about a who's gonna be the trustee of the trust. What you can do is you can actually say, okay, say that you've had a siblings with one has special aids windows on. You can tell your daughter she you're gonna be the trustee of the special aids trust, but we're also going to have this corporate trustee come on as the secondary trustee because they're gonna know all of the rules and they're gonna be able to do the taxes and all the distributions, and then you can just kind of be there as the person that's kind of like the the middle person. What's also beautiful about a corporate trustee is it can help with a lot of like family fights. So, for example, I had a client who the person with a disability needed like wanted a distribution for something to buy something they shouldn't have they shouldn't be buying. And instead of the sister having to say, like, no, I'm not gonna give you the money, she was able to say, like, the corporate trustee won't allow it. They're kind of a scapegoat. So it allowed the the brother and sister to have to still like maintain their relationship and then just saying, like, the corporate trustee is the bad guy, not me. You know, that's a big one.
SPEAKER_00I think updating it too, because I know like just from my own personal experience, my family, my parents, we have guardianship of my sister, and they did it all in New York when we we lived there when I grew up and then moved to Maryland. And it was just this past year, even though they've been here for many, many years, that they finally went and updated it. Being in the field, I kept telling them it's important. God forbid something happens, like it's not updated. She still lives in New York, I'm down here. But I think it was just something they dragged their feet on because they're like, well, we did it already. I don't want to go through the process again. I have to find another attorney, I have to sit down, I have to plan, I have to do papers. So another one that people don't want to come back and revisit the conversation after they've already had it once.
SPEAKER_01First, they might not know they have to go get it redone if they move to a new state. And then it should be updated every once in a while, or at least reviewed regularly. Reviewed. Um and then sometimes a lot of people they go to see an estate attorney and then they get all these all their documents are in place and perfect, and then they never actually fund the trust. I know that it's really important to go see that. I always have my clients go get their estate documents done basically right away. And then they come back and see me, and the first thing that we do is go for beneficiaries and making sure that everything is funded properly. Um, because a lot of times people will go see their estate attorney, they get all their documents, they put it on the shelf and they never think about it again. And then when they pass away, it's all gonna blow up in their faces and none of their wishes are going to be fulfilled because they didn't actually do the second part.
SPEAKER_02Yeah.
SPEAKER_01So yeah, those are some big key things. But I don't know that it's people avoiding it. I think those people maybe don't they don't know.
SPEAKER_00Yeah, you don't know what you don't know.
Planning is necessary
SPEAKER_03Betsy, one of the things that I heard you say earlier when you were talking about your client, you had mentioned how the family had communicated that they feel like they didn't have enough. So when it comes to families who don't have significant wealth or assets, what do you say to reassure them that planning is still a good idea and and necessary?
SPEAKER_01Normally there's a there's going to be a house involved. Normally there's going to be cars and all of this stuff. So that's all stuff that we have to kind of flush out. But also just going to somebody who kind of understands this area and even understands different resources that might be available to help if they don't have a lot of money to leave. We can find resources that might be able to supplement some stuff. You know, whether it's looking for Section 8 housing if they're able to go live on their own, obviously making sure that government benefits are always going to be preserved because that's going to be so crucial, having Medicaid and SSI or SSDI. A lot of people don't know that as soon as they go on Social Security, their children will start to be able to get a benefit off of them. And so they might not even mention it to the Social Security office that they've got a child with a disability who's who might be able to get something from their or get half of their social security benefit. So there's a lot of things that it doesn't have to be like full financial, necessarily financial planning, but sitting down with a financial advisor who at least knows these things that you can think about. Like you might not have a lot of money to invest, but at least you can say, this is what I've got. What can we do? You know, that's going to be a crucial thing for the family to do.
SPEAKER_00You bring up a good point because we just had a workshop with the went over SSI and SSDI. And I think just in our role as transition coordinators in the county, like we know, okay, the student turns 18, we tell the family to apply for SSI because now they're technically an adult. But I think a lot of times even we didn't have the knowledge that it could benefit them to look more at the SSDI that a family member or the the parents receiving, or if they're retirement and like those logistical things, like to have someone to kind of educate them on what it all means because you get the paperwork from Social Security. I just sat with a family member or a parent yesterday who, you know, she's trying to reapply it because he was receiving it prior to 18 and now he's 18 and she has to justify he still receives it, and it's just the most confusing paperwork, and it has to be due back within like 10 days, and she was very anxious about getting it returned because she didn't want to mess anything up. So I think it is important to be able to sit down, like you said, and kind of lay out here's what I have, what do I need to know? Yeah, exactly.
3 Things to get started
SPEAKER_03I feel like that that segues very comfortably then. We have a parent who is listening to this conversation today and they are feeling completely behind, they don't know where to start. What could you say to them? Three practical steps that they could that you could recommend that they could do just let's say this month.
SPEAKER_01Well, you can get started on that letter of intent right away. You don't need a financial advisor. If I mean if any of your listeners out there even want to contact me and I can just email them my template, it doesn't have to I I could at least just give them the template so they can at least get started on that letter of intent. That would be huge. Opening up an ABLE account. If you've got a child with a disability, just open it and put a little bit of money in there. It doesn't have to be a lot because you can invest that money too. If you're if you're not going to be using that money anytime soon, invest that money and have it work for you. Have it grow tax-free so that it can come out tax-free. Those are two, and then I mean, honestly, if if they don't have any estate planning done, they need to start looking into that. Those are three things that I have people start doing immediately. I often say, like, I can't plan for you until we have the estate plan, it is going to be sort of the foundation of where our planning is going to start. So I would say, I know that maybe the estate plan can't get done this week, but get started on that letter of intent, open that ABLE account, and schedule a meeting with an with an advisor and make sure it's an advisor that understands this area.
SPEAKER_00I think those are good points.
No shame in where you start
SPEAKER_03One of the things that always strikes me about, and I've mentioned this to Megan several times, is again, anytime we have these financial discussions, I am not gonna lie, I glaze over because you start talking about tax plans and and special needs trusts and able accounts, and like I I appreciate the ability to break it down like almost like conversation by conversation, because as soon as you start talking finances, I've checked out you can imagine how the parents feel right. Yes, exactly.
SPEAKER_00Individuals, yeah.
SPEAKER_01Yeah. I mean, I think that that's why I think that stories really help. You know, if I can become my clients with and say, like, listen, I've had this situation before, and here's how we how we dealt with it. And I think that it it helps them understand it better and it helps them not feel alone. Yep. Similar situations. Yeah, like I I don't want parents to ever feel like maybe embarrassed that they haven't done anything yet or any shame at all. I'm always like, you know what? We can only move forward. I like to live my life by that. Like, you know what? If I made a mistake, I learned from it and I move forward. That's all you can do. So let's not let's not be mad at ourselves about what we haven't done. Let's just move forward. Let's just start, let's just start now.
SPEAKER_00That's what I tell families when they come to us and they're like, okay, I know I'm behind the ball. I'm like, nope, now is the perfect time. You're in the right mindset. We'll get started and we'll just look
Story to tell
SPEAKER_00forward.
SPEAKER_03And then Betsy, I know this has kind of taken a little bit of a step back, but you you mentioned stories. Why do I feel like that there is a story that you need to tell? You have four siblings? Yes, all with special needs. So tell them.
SPEAKER_01I have more than four. So so I actually have 12 siblings. I am one of 13. There's one boy and 12 girls.
SPEAKER_00Oh wow.
SPEAKER_01Um my parents, when I was eight, seven or eight years old. I can't remember how old she is right now. My parents started adopting. So I actually have seven adopted siblings. And the four sisters that have Down syndrome, they're all adopted. But like they were adopted when we were all like little kids still. So definitely grew up as just one gigantic family. And from a very young age, I told my that I was going to be the in charge of my sisters, and none of my other sisters were allowed to. So I, you know, my my daughter knows that I actually we are in the process, and this is something that I'm starting to encourage with my clients to just because I and I didn't even think about it until I started doing it myself. Two of my sisters are going to actually come live with me in a few years. As soon as my one of my sisters graduates from her adult education program, they're gonna move in with me. There's Janie and Agnes. Agnes is all gung-ho, she wants to graduate because she wants to come live with me. Janie is much more of a homebody and she loves my dad and she loves her dogs and she doesn't want to leave. So what what we've actually started right now, years before this is actually gonna happen, my sisters come and stay with me one weekend every single month. So they can start to acclimate. And so now when I go over there, she'll come give me a hug and she'll say, I'm gonna live with you, I'm gonna live with you. Oh, she's starting to like it's starting to really start to settle in with her that she's going to come live with me in a few years. And we'll go see mom and dad all the time, so don't worry. We're not that far away, but this is gonna be your new home. And I think that that maybe you guys, as transition specialists, do this, like half people do this already, but I never really thought about if you if there's going to be some sort of a transition like that, why not start it real slow and get people to really get the person who this all revolves around, get them comfortable with the idea.
SPEAKER_00Yeah, I will say we work with some good providers who do just that. They'll have them come visit the the house, they'll have dinner, they'll have them come stay for a night, you know, and slowly acclimate them over. But you're right, like it does take time. I know I have to laugh because my sister, you know, she lives in a group home in New York, and my parents moved down here to be near their grandchildren. And I would say to her, you know, Ashlyn, like you're gonna come live in Maryland one day too. And she just looks at me and goes, no, thanks.
SPEAKER_01I'm like, Yep. Yeah, they can't they, you know, people are comfortable, they're set in their ways. We'll work on that, but okay. It's also so interesting because some people they really struggle with like housing. I've noticed that like with different meetings that I've had, and where will my child go? Are they gonna go live with a sibling? Are they gonna live in a in a home? Are they gonna live on their own? Things like that. And that's another one of those conversations that I have with my clients. That's really gonna be based on the person. Well, I have four sisters that have Down syndrome, and two of them are gonna come live with me. One of them has no interest, she wants to go live in an apartment, which will eventually end up being uh a home because she she can't necessarily live on her own, but she does not want to live with her sisters. They're all younger than her. She's the oldest, she wants to be on her own. And then I've got a sister who the youngest sister that she's still kind of a we're she's up in the air. We don't know yet. She's in the movement payments for a while. But like every single person, we need to make sure that that everybody understands that we're all individuals, whether you have a disability or not, and we all have our preferences, whether you have a disability or not, and let's take their wishes into account. So exactly. I agree.
SPEAKER_03That is fantastic. Betsy, we can't thank you enough for having this conversation with us. Real quickly, tell everyone how they can find you.
SPEAKER_01Yeah, so you can find me at specialneeds advanced planning.com, or you can find me on YouTube, and I think that that is youtube like dot com slash elisabeth Larson. Oh gosh, I should probably know that. Or you can shoot me an email at elisabeth at cpsplan.com.
SPEAKER_03Very cool. And of course, there will be a link in the show notes as well. Well, again, we cannot thank you enough. This is a again. Yeah, wonderful conversation. Again, it's always one of the harder ones for me. So I I appreciate all of the input. Yeah.
SPEAKER_01I will throw in there, and I I don't have the exact date yet, but I'm going to be having a I'm going to be putting on a webinar probably sometime in mid-July. So if anybody, I'll send it to you guys, all the information, so that if you want to send it out to your all of your listeners, the more people that that join, the better. They're going to get the letter of intent template. They're going to get a bunch of other documents just for attending. You know, it's obviously just for educational purposes. I think that it'll be really good and very informative.
SPEAKER_00Yeah, definitely send it our way. We'll spread the word. Love it. I will. Well, thank you, thank you, thank you.
SPEAKER_02Yes. Thank you, Betsy. Yeah.
Outro
SPEAKER_03Our discussions are everywhere. Apple, Spotify, YouTube Music, and others. So hit that follow button and you won't miss out. Please help us spread the word about our discussions by leaving us a review. Links to the information from our conversations are always in our show notes. Surf to our sister website, www.postsecondarietransition.com. Full of information and links to more resources. Our YouTube channel contains curated videos that revolve around transition, including playlists for guardianship, alternatives to guardianship, able accounts, and more to come. Thanks so much for your time spent with us, and we look forward to talking again soon.
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