Special Needs Planning: Vision for the Future
This is the third installment in a number of articles which are based upon my book Special Needs Planning: A Simple Guide for Families in New York with a Loved One with a Disability published by Graylake Publishing and released in the third quarter of 2014. The book is a response to inquiries from family members and those who support them about how best to provide for a loved one with a disability. While my primary focus is the legal aspects of the process, I have realized in my work that the process for providing a secure future for a loved one is far broader in scope. This installment will explore the first element of a “Vision for the Future.”
There are three elements of envisioning for the future of a loved one with a disability. They include a resource plan, a financial plan and a legal plan. They are all interconnected, and planning for one element cannot be a substitute for planning for another element.
The first element of a “Vision for the Future” is resource planning. By this, I mean identifying the financial and human resources available to the loved now and into the future. Resource planning overlaps in some ways with financial planning. However; resource planning is more involved in identifying human and financial resources available to the loved one; whereas, financial planning focuses on realizing on the financial resources available to bring them to bear on the supports and services needed to realize a fulfilling life. A care giver and his or her “circle of support” should inventory the resources available first, to provide for life’s necessities; and then, to provide for life’s enhancements.
Except in the most affluent of families, there will always be a tension between what is desired and what can be afforded. At its core, the circle of support has an essential service to perform by balancing the current demands and future needs! It is generally an easy task to advocate for providing an item or service that fulfills an immediate need. The members in the core of the circle of support must be charged with the duty to “take the long view.” They must compare the immediate request against the legal, financial and human resources available for the future. Here is where a financial advisor or insurance professional may be helpful through suggestions for a plan or product which will insure or increase future resources to meet the added burden of the immediate need.
Identifying the sources of financial resources begins with the preparation of a current family budget and a personal balance sheet. The budget will list the all sources of current family income as well as all current family expenses. In this way, a budget reveals what is available for savings: retirement savings; college savings for able children; savings for the needs of a special needs child; saving for vacations; and saving for contingencies. Budgeting must be an on going process, with the budget updated at least annually. While it is true that a care giver will take care of the loved one’s needs from current income for as long as he or she is able; it is also true that the care giver must plan for their own retirement and the consequent drop in income.
The personal balance sheet will list all the property and assets currently owned by the family and identify claims against those assets. The difference between the assets owned and the liabilities owed is identified as the care giver’s “net worth.” A balance sheet should highlight the amounts currently dedicated to retirement, the needs of a loved one with special needs and a reserve for contingencies. A balance sheet will identify the source and amount of debt the care giver has, and it will allow him or her to target the debt that can be reduced or eliminated.
The processing of budgeting and measuring net worth and future financial resources must also be performed for the loved one with a disability. What is a realistic assessment of the loved one’s earning capacity, and what government benefits is the loved one receiving or likely eligible for? Identifying the loved one’s financial resources also involves an analysis how those resources are structured to maintain eligibility for government benefits.
Budgeting and a determination of net worth are an essential step in the process of resource planning, but they are only the first step! The care giver must next project into the future the sources of financial resources and the likelihood that they will be realized. An important part of the financial resources that may be available for a loved one with a disability are government benefits and his or her ability to hold meaningful employment.
The possibility of a loved one’s employment provides opportunities and challenges at the same time. Care givers should never underestimate the impact on a loved one’s self esteem provided by meaningful employment, whether in a sheltered workshop or in the community as competitive employment. The income derived from employment opens options in housing, recreation, and health care. It may also have a detrimental impact on government benefits. For example, income from employment reduces SSI benefits by 50% of the amount earned in a month in excess of $65 each month. Medicaid also has income limits, but there are programs available to encourage Medicaid recipients to work. Resource planning involves research of these programs and working with a service coordinator to enroll a loved one with special needs into the appropriate program.
The next installment of this Newsletter will discuss the financial element of a “Vision for the Future.”