The Five Factors of Special Needs Financial Planning

For families with a loved one who has special needs, planning ahead can feel overwhelming. That’s why Sequoia’s Special Needs Planning team has identified five core areas that serve as essential building blocks: family and support, emotional, financial, government benefits, and legal. We recommend revisiting these areas annually to ensure your plan continues to align with your family’s evolving needs.

Family & Support Factors

Build your Team to Carry On. A parent is irreplaceable, but the team you build carries on. Organize your plan by completing our Letter of Intent.
Communicate your vision. Reach out to the people you want to be involved with your child with special needs and help them understand your expectations of their role. No one likes surprises; let them know you have a plan in place, your “Team to Carry On.”
Properly plan for gifts. When family members or friends offer to help by including your child with special needs in their gift or estate plans, encourage them to have their advisors speak with your advisors. Their generosity may unintentionally jeopardize eligibility for government benefits.
Stay informed. Family support agencies in your area can help you stay informed and knowledgeable. Seek out their newsletters, workshops, blogs, and emails. In addition, read through the blog posts on our website.
Include siblings. Your children share the longest relationship on earth. Get them involved, as appropriate, in building and sustaining a family environment where everyone can thrive.

Emotional Factors

Remove emotions from the planning process. Work with impartial and unbiased professionals to make objective decisions and remove emotions from the planning process.
Take time to understand and be patient. There is much to learn and understand; be patient with yourself, your spouse, and your family.
Support the siblings. Help siblings of your child with special needs to connect with other siblings who have a loved one with special needs. Look for a “SibShop” in your area or connect with the broader Sibling Leadership Network (SLN) or your SLN state chapter.
Complete a letter of intent (LOI). Help prepare siblings, future guardians, caretakers, trustees, and successors with important information about your child with special needs. This includes who’s who in their world(s), their medical information, likes and dislikes, routines, and other special details that perhaps only you know. Use our Letter of Intent and update it at least annually.

Financial Factors

Make a balance sheet. Take an inventory of your assets and liabilities. Do the same for your child with special needs if they have savings or debts. Write it all down.
Get a handle on cash flow. Identify expenses and sources of income today and in the future for you and your child with special needs. Consider housing support and when it may be needed. Use our Housing Checklist as a guide.
Get an assessment. Find out how much it will cost to provide the services and support your child with special needs will need for their lifetime. This will help you set realistic goals.
Protect your family. Review your life insurance, long-term disability insurance, and long-term care insurance coverages for primary caregivers. Explore medical insurance coverage options for all family members.
Save for your future. Build your financial independence first. Maximize employee benefits for retirement savings and strategies for stock options.
Save for their future. It is crucial to begin saving for the future as soon as possible, but do not establish savings or investment accounts in the name(s) of your child with special needs. Consider establishing an ABLE account, if appropriate.
Monitor and review. Monitor your family’s planning pressure points along the Special Needs Planning Timeline and periodically review your financial plan.
Work with professionals. Ask for referrals from other families or organizations that you know for names of their trusted advisors. A good starting point is to use a Certified Financial Planner (CFP®) or a Chartered Special Needs Consultant (ChSNC®). Ensure you understand the fee structure before engaging professionals, as it helps manage expectations regarding what you need to do and what you will receive, both now and in the future. Equally as important is working with professionals who are a good fit for you and your family.

Government Benefit Factors

Federal vs. state government benefits. Know the differences between government benefits. Apply for all benefits that your child with special needs may be eligible to receive.
Determine eligibility for adult services. Know the lead state agency that will provide support to your child with special needs upon their turning 22. Ask about eligibility requirements for services.
Maintain and protect eligibility for benefits. It’s important to maintain the future eligibility for benefits of your child with special needs, as the benefits can serve as a safety net for the future.
Contact the Social Security Administration. Before turning 18, inquire about Social Security income eligibility for your child with special needs. When a parent dies, becomes disabled, or retires, inquire about Social Security benefits.

Legal Factors

Create a proper special needs trust (SNT). An SNT will enable you to leave an inheritance to your child with special needs without jeopardizing government benefits. Consider all options when selecting a trustee, including an individual, a professional, or a corporation.
Check beneficiary designations. Check designations on all life insurance, annuities, and retirement plan accounts. These designations will override provisions made in your will. Do not name “children equally” as the primary or contingent beneficiaries.
Understand guardianship and alternatives. Full parental guardianship may or may not be the best option for your child with special needs. Explore alternatives to consider before the age of 18.
Work with a disability law attorney. Seek out experts in this area of disability law and estate planning. Find one in your area through The Academy of Special Needs Planners or Special Needs Alliance.

Putting It All Together

The planning process can feel overwhelming, with numerous people, agencies, programs, and personalities to consider. Knowing precisely what will be required to provide for your family’s future needs and goals may not be possible. Take it one step at a time. If you have questions or need additional guidance, you can find additional resources on our website or contact Sequoia Financial Group and a member of our Special Needs Financial Planning team will assist you in shaping your family’s future.

The views expressed represent the opinion of Sequoia Financial Group. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Sequoia believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sequoia’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not an indication of future results. Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

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