Financial Planning

Financial Planning The Letter Of Intent The Special Needs Trust

Richard W. Fee, Ph.D. Part I: The Exceptional Parent web site Part IV: The Exceptional Parent, June 1999, p. 78-80 Copyright ©1999 by Psy-Ed Corp. All Rights Reserved.

Reprinted with the expressed consent and approval of The Exceptional Parent, a monthly magazine for parents and families of children with disabilities and special health care needs. Subscriptions cost is $39.95 per year for 12 issues; Call (877) 372-7368. Offices at 555 Kinderkamack Road, Oradell, NJ 07649.

The purpose of this four-part series is to give families the knowledge and the tools they need to plan for the future of a child with a disability. This information can assist you regardless of your child's age or disability. It will take you through a comprehensive planning process that we hope will provide you with peace of mind.

Sometimes, as I watch a young family play with their child who has a disability, I wonder what the future has in store for them. I know from my 30 years experience as a teacher and administrator in special education, that the hopes and dreams of these families are no different from anyone else-they simply want the best for their child. Parents of children who have special needs have fought countless battles to help their child receive a good education, have a social life, gain employment, and find appropriate housing.

Yet, I know from counseling them that their greatest concern is generally suppressed because it always seems too overwhelming to contemplate. It boils down to one issue: "We know our child will always need help to maintain everything we have helped her achieve. We will not always be around. How can we plan so she will always have a comfortable life without us?" Planning is not a question of "what if?", but rather "when?"

Some families believe that they do not have to plan because their child has only a "mild" disability. The world is sometimes harder on those with marginal problems. These individuals often become the marginal problems in society. Without continued advocacy and support, they become the followers... and the victims. You know that no one will care for or love your child the way you do.

Each day, each week, and each month of postponement dims the future just a little and adds to the pressure upon the family. Added pressure is not needed as the family fights the daily advocacy battles.

Planning needs

For many younger parents who have enjoyed modern early childhood services and the Individuals with Disabilities Education Act (IDEA)-mandated educational services, the greatest shock comes once their child graduates at age 18 or leaves the education system at age 21. The wonderful continuum of educational services ends with a thud. The system for delivery of services is very different for adults. It is fragmented across an array of providers and usually has eligibility criteria. Having a disability which was identified while the child was in school, for which he or she received services, does not automatically entitle the individual to services in the adult system. Therefore, planning and funding the future falls squarely on the shoulders of the family.

What are the key areas that every family, regardless of the age of the child or type of disability must consider?

1. Who will look after your child when you are old, acquire a disability, or die?
2. Who will provide the necessary funds to ensure a comfortable life? Most people with disabilities will receive some form of government benefits-SSI (Supplemental Security Income) or Medicaid. The amount of these benefits are one-third less than a poverty level income. Parents traditionally provide the difference in cash and resources to bring up their child's comfort level and improve the quality of life for them. Where will this extra money come from if the parents are not there to provide it?
3. Who will manage the funds or resources you do leave, so they will last your child's lifetime? A lifetime with good medical care could extend many years after you are gone.
4. Where will your child live?
5. How will funeral expenses be paid? Funerals can be expensive, and cost more in the future.
6. Will your family and friends support the decisions you make and fund? Will they be shocked with the unexpected responsibility, or welcoming and supportive of your decisions?

Planning approaches

How parents address these issues has varied over the years. A crisis, such as the death of a parent, may prompt families to use a typical Estate Planning approach. This is where a lawyer draws up a will, with or without a trust. A portion of the estate is left to a relative who then looks after the person with a disability. This type of planning relies upon relatives to take over and forces the child to always be dependent.

Families with some significant resources may call upon financial advisors to devise a plan for allocation of assets. These additional resources combined with a good legal plan allow the person to enjoy a better quality of life. Without the correct legal or tax advice, however, the extra income may also disqualify your child from much-needed government and medical benefits. Ultimately, this plan still makes the child dependent upon others to make the best decisions.

Those who have no special resources or who do no planning, rely upon the government welfare system or a local charity. Too often, the Medicaid-funded institution or group home with $30 a month for personal needs, is the typical government benefit.

In the last 15 years, the charitable or non-profit community has offered serious solutions to the plight of parents. Developed by parents involved in charities, this approach centers planning on the needs of the person, not a legal document or an investment. The approach starts with "Circles of Friends"-all those involved in the life of the person with a disability-coming together to help plan and accept responsibility for the future. The members of the circles can be individuals or a charity's advocacy service.

Generally, if the charity forms the circles, it is done when the family contracts with them in advance and involves a fee for service. The charity would then assign a social worker to visit and look after the person who has special needs. In some cases, parents will request that the social worker organize a personal Circle of Friends for the individual. Unfortunately, parents may leave out or postpone the still-important legal and financial components when using this approach.

Life Planning crosses over

Planning for the future is not about wills, trusts, insurance policies, investments, or groups of friends. It is about one thing-the future life of a special person who is an important, yet vulnerable member of your family. The "Life Planning" approach is a way to bridge the gap between the families and non profit groups on one side and the legal and financial professions on the other. The emphasis of this approach is upon the life of the person with the disability now and in the future, with and without the family or Circle of Friends.

We will examine the problem of how to be thoroughly prepared from four different components of the Life Planning approach. We will also offer specific guidelines to help you answer each of the questions posed:

1. The Life Plan: How do you develop a Life Plan for the future that meets your family's unique needs?
2. Funding Plan: How do you determine the costs of this Life Plan and then find the resources to fund it for your child's lifetime?
3. Legal Plan: How do you make it "legally sound?"
4. Implementation Plan: How do you implement the Life Plan, so it will carry out your wishes when you are unable to care for your child?

Letter of Intent

Put the hopes, dreams, desires, and wishes that you thought out in the above Life Planning areas, into writing. Record your child's history. Otherwise, your child's future may be based on what others perceive to be the best course of action at the time, not what you know to be best as you experienced over many years. Let future care providers know what worked and what did not work. As one of the few people on earth, who knows your child well, share that intimate knowledge so that the same level of care can be provided in the future. The simplest thing that you do not share, such as the fact that your child sleeps with a certain stuffed animal, can mean unwarranted misery. What you write down shouts to the world that your child has certain needs.

We call this method of sharing information about your child a Letter of Intent. There are many different approaches, all of which are acceptable. Handwritten or typed, the format does not matter. Address it, "To Whom It May Concern," or simply as a letter to your child: "Dear Mary, this is what I want for you in the future." There is no right or wrong method. It is the information and love that is conveyed that makes it a success.

1. Start at the beginning. Provide a brief summary with essential information such as names of the family members, child's birth date, social security numbers of the child and parents, marriage dates, etc. Then go to the heart of the letter.
2. Take each of the life planning topics one by one. State the topic such as Residential Care (you can underline it) and then write one paragraph about where your child has lived in the past, the next paragraph about where he or she presently living, and then end it with a list of the team-based options for future residential settings. You can add as many details, and reasons for your decisions as you feel necessary.
3. Sign and date it at the end. The Letter of Intent is complete when you feel you have shared everything that a future care provider may need to know in order to offer the same quality of care that you have always provided. You will be amazed at how much you want to communicate.
4. Emergency Instructions should be listed on one page that can be attached to the front of the letter. In the event that you are suddenly incapacitated, you want the person who takes over to have certain important information immediately. This information should include: medication (location/dosages/times), medical conditions, name of doctors, person to contact for more information, case manager, recommended respite care, where your child should live during a crisis (relative, respite care), behavior management techniques, favorite foods, sleep routines, location of clothing and favorite toys, etc. Keep it simple-you can refer to your Letter of Intent for details.

The Letter of Intent is also the basic blueprint that you will use to direct professionals. A lawyer with special needs experience reading this letter should have enough background information to tailor a personalized legal plan. The financial advisor should know exactly what costs are involved and then may help find resources to make the plan work. If you elect to use advocacy services, they will also have a better understanding of your child and can assign a compatible advocate.

The Letter of Intent is not a legal document. It does not compel anyone to do anything. It is your Life Plan and it is one of the most important documents you will ever write. A will, trust, or insurance policy will carry out your wishes. The Letter of Intent is a summary of your wishes.

In the upcoming articles, we will use the Life Plan/Letter of Intent to guide us through the legal and financial maze.

When we started this series of articles on how to plan for the future of your loved one with a disability, we explained that all of the legal documents or financial instruments in the world are of no use, unless you have an overall Life Plan. By following the steps outlined in this series, you will have developed your Life Plan, and sought out your personalized legal and financial tools. Now, what is the next step?

With all the pieces in place, the next step is to ensure that your plan can be accessed easily and carried out quickly. Too often, we develop great legal documents and carefully store them away for the reading of the will. When a person who has a disability is depending on your assistance, he or she often cannot wait for your instructions to be found months later. You may certainly keep copies of important documents in a safe deposit box at the bank, but you also need to make sure that the information is readily available to future careproviders.

Getting It Together: Assemble a Life Planning Notebook

It makes no sense to write out Letters of Intent and draft wills, as well as provide financial funding, if no one can locate the documentation. Families should gather together all of the information that they believe future careproviders will need. For motivation, imagine that you are departing on a trip tomorrow morning and may not be returning. What kind of information would someone need to provide quality care and assistance in your place, to your loved one with a disability.

Here are some tips for assembling this information. Purchase a large three-ring binder notebook with 10 to 12 dividers for different topics of information. Be sure to put a title on the cover and spine, (e.g., "John D. Doe's Life Plan"). Then, begin the process of sorting out the most important information you want to share. Remember to include in this notebook any information that you think a careprovider will need to continue the high level of care you now offer. Every family will have their own ideas of what is important, but some common information sections that should be included are:

1. Letter of Intent: This document summarizes overall hopes and desires of and for the person who has a disability. Place it at the beginning of the notebook.
2. Important Cards: Include photocopies of Social Security, Medicaid/Medicare cards and private health insurance cards. The first questions agencies will ask of future careproviders are "What is the individual's social security number?" and "Is there private or government health insurance?" A copy of the birth certificate is also essential.
3. Legal Documents: Place photocopies of your Last Will and Testaments, Special Needs Trust, Durable Powers of Attorney, and any other legal document in this section. Note on the divider where the originals are stored. It is generally best not to place them in your safe deposit box where access may be delayed during probate, although you may want to keep photocopies there.
4. Financial Instruments: Include photocopies of all life insurance policies, investment funds and the like that will be included in the Life Plan. This will be a good time to make sure you changed the beneficiaries so that your loved one does not receive a direct inheritance which may result in ineligibility for important benefits. Paste the business card of your financial adviser on the front of the divider.
5. Medical Records: Divide this section into two parts-common and emergency medical issues (see below for detailed explanation). Most people who have disabilities are cared for by many different medical specialists over their lifetimes. A list of the names and addresses of all doctors, dentists, occupational therapists, physical therapists, speech therapists, and other medical people who have treated your loved one is very useful. Include photocopies of key medical reports and diagnoses.
6. Education Records: Offer a one or two page summary of your loved one's education. This is even more important if he or she is still in school. Attach copies of any current Individualized Education Plan (IEP) and Individualized Transition Plan (ITP).
7. Employment Records: This is a summary of where and when the person was employed, describing the positions held. Include work evaluation reports.
8. Family Records: It is always nice to add a small photo collection showing the individual with the family or participating in activities in elementary school, church or synagogue, scouting, graduation, and so forth. Pictures which capture your loved one's personality, help careproviders think of the individual as a person, not a case.
9. Other items: Personalize your Life Planning Notebook by adding things that are important to you, your family, and the person who has a disability.

Keeping Up-to-date

There are two very important items that will change and need to be updated on a regular basis: medication instructions and temporary arrangements.

Medication: Many people who have disabilities must take medication at specific times each day. You may want to note the current instructions on a brightly-colored piece of paper and attach it to the inside of the front cover. In this way, anyone who picks up the notebook will know where you keep the medication, the types and reasons for each one (e.g., behavior, heart problems and seizures), and the time, amount, and methods of dosage. Paste in your current doctor's business cards and that of the pharmacy where prescriptions are filled.

Temporary arrangements: These should be stated on a separate page. If you are gone, what should be done for your loved one right away? Give clear instructions, such as: "1) Administer Suzie's medication. 2) Call her sister Ann at (phone number). Call her caseworker, (name and phone number). 4) Notify our religious adviser (name and phone number)."

The Life Planning Notebook is a device to assist you in implementing your plan. Like the Letter of Intent, it is a continuing process as you add and delete items. One of the unique benefits of this notebook is its visibility. Always keep the notebook where others can easily find it, such as the top drawer of a desk. Let your friends and relatives know where they can find it in an emergency.

Short-term Implementation

As we age, there is a greater chance of being incapacitated, such as for an operation or for longer periods such as nursing home stays. We are still in the picture, but we cannot provide direct care and supervision. Fortunately, a Life Plan can bridge the gap.

Assume for the moment that your loved one lives with you, and you are in an accident while driving alone. Who knows that your loved is at home and needs care? You may be unable to speak. That is why it is important to keep a special Emergency Card in with your driver's license. There is a sample below. When someone looks for your identification they will find the Emergency Card and know that you have the responsibility for caring for a person who has a disability. They will know to call certain people or agencies that can get to your home to look after your loved one. It may even be a life saver when it alerts others that important medications must be given at specific times.

After the people you have entrusted with looking after your loved one's interests, learns of your temporary setback, they will go to your home and begin the short-term transition process. The Life Planning Notebook guides these people in giving the important medications at the scheduled times, contacting friends, relatives, and important agencies. The most important role for these people is providing reassurance to your loved one about your circumstances.

Long-term Implementation

Many of the steps in the short-term implementation plan will also take place in the event of a parent or guardian1s death. The trusted person will make the temporary arrangements and then begin to examine ways to carry out the suggestions and hopes for the future, as stated in the Letter of Intent.

Generally, a family member will arrange for a meeting of the key participants to discuss the overall Life Plan. This team may include family members, attorney, financial adviser, careprovider, employer/workshop coordinators, representatives of local charitable agencies, and advocates, guardians, or conservators. The main role of this team is to attempt to carry out your wishes as stated in your Letter of Intent. If you have clearly described your wishes, spoken with these people in advance, and provided the proper legal documentation and financial support, the implementation process can begin quickly and smoothly.

Person with the Disability

We know that at some time, final arrangement will be needed for the person with the disability. Issue clear, written instructions for these arrangements in your Special Needs Trust and Letter of Intent. When the time comes, the trustee of the Special Needs Trust will be responsible for providing a dignified funeral, including any religious service you desire. Once these duties are discharged, the trust will normally end and any remaining funds will be distributed. If family members have already received a portion of your estate, this may be a wonderful opportunity to leave special bequests to people and charities that have helped during your loved one's life.

The development of a well thought-out Life Plan will go a long way in helping to ensure that your loved one enjoys a comfortable life. Keep it visible and, most of all, keep it up to date. It may be your most important gift to your loved one.