Special Needs Financial Guide

Guest post by Benjamin Weiss of MetLife’s Center for Special Needs Planning.

Families with children or adults with special needs are confronting cuts in services and assistance even as they look for more guidance to make financial and other pressing decisions, a new, in-depth MetLife study found. As they experience a harsher economic climate, family caregivers are seeking meaningful information to help with special needs planning for their dependent. “I do believe the resources in my community will continue to disappear… I think parents will have to be more creative,” noted a caregiver in California who was one of the 1,000 individuals who participated in the MetLife Center for Special Needs Planning℠ 2011 Torn Security Blanket poll.

“The mixed picture painted by the poll findings and follow-up interviews with caregivers shows that a struggle exists for many of these families. Part of the struggle is to obtain useful information in a substantive context instead of scattered pieces from various sources. But at the same time we see the amazing perseverance of caregivers who are almost always willing to take a few additional steps in order to build a sounder financial framework for their dependents. This is an encouraging sign compared with our original study from six years ago,” said Kelly Piacenti, director of the MetLife Center for Special Needs Planning.

On the positive side of the ledger, 38 percent of caregivers have written a Will, compared to 32 percent in 2005, and 36 percent planned for their dependent’s future housing, up from 31 percent. The greatest area of growth was in the number of caregivers setting up special needs trusts – 21 percent reported setting up a trust, nearly double the amount in 2005.

Still, much remains to be done from a planning perspective, the study found. While, seven in ten caregivers responded that they had completed at least one financially related task, many have yet to address crucial gaps. For example, less than half (49 percent) of caregivers have identified a guardian for their dependent should they no longer be able to care for them. More than half (56 percent) said they are unfamiliar with the steps needed to identify a trustee to watch over their dependent’s financial holdings in the future. Another 55 percent weren’t sure how to set-up a plan for lifetime financial assistance for their dependent.

Caregivers Dissatisfied with Available Planning Information, Need Education and Guidance

A key factor in this inaction appears to be the difficulty that many caregivers encounter when looking for information and guidance – especially in the area of special needs planning. Caregivers are less likely to use a single source for financial information than they are for medical or educational information – perhaps pointing to dissatisfaction with the information available for planning, and the need to go to several places before finding solid assistance. What’s more, more than half (59 percent) of caregivers said there is too little information available about financial assistance (benefits and support provided by government agencies) and 55 percent said that it is very difficult to find. Only about one-third of families say they receive a support service, and, although they may not qualify, many caregivers do not know why they don’t receive a service. At the same time, 69 percent said that they are very concerned about being able to provide lifetime care for their dependents with special needs.

Employer Assistance Welcome

One avenue for planning assistance that appeals to caregivers is their employers. Over two-thirds say that access to a special needs planner would be helpful if provided by their employers, while 64 percent would welcome employer-sponsored workshops on special needs planning and access to legal services. Three-fourths of caregivers are likely to attend workshops about special needs planning if offered by their employer.

“With millions of American workers caring for a child or adult with a special need, this is very much a timely issue in the workplace, and it provides employers an opportunity to help,” said Michael K. Farrell, executive vice president at MetLife. “Providing support and education for these caregivers promotes greater employee loyalty, lowers stress, and contributes to a more productive workplace. Programs, such as the special needs planning workshops that MetLife provides through PlanSmart℠, can be a valuable addition to a benefits menu,” he added.



Ten Steps to Help Caregivers Plan

To help address a range of concerns, the MetLife Center for Special Needs Planning has created ten steps of Basic Financial Guidance for Caregivers. Each circumstance is unique, so caregivers should consider their own situation as well.

1. Plan for future medical, educational and housing needs for your dependent. Start by thinking about what your dependent’s needs will be in the future – and develop your financial strategy based on these projections. Will they need weekly daily medical treatments? Will they need funds for college? Would they live in a group home or need their own space?

2. Review beneficiary designations. To continue to receive federal aid, dependents with special needs cannot have any assets in their name (cash, art, jewelry) that is worth more than $2,000. Check with close friends and family to see if they have designated your dependent to receive any inheritance or insurance benefits from their estate– if they have, it’s important that they leave this amount to your dependent’s special needs trust (see number eight on this list for information on trusts). Don’t let well-intentioned friends and family unknowingly cause your dependent to lose access to valuable resources.

3. Have a family meeting to discuss your dependent's future needs. Just as caring for a dependent with special needs is a family affair, so is financially related planning. With the thoughts that you have prepared on your dependent’s special needs throughout their life, meet with your family members to discuss their concerns and options for future care. This is also a good time to broach the beneficiary designation issue discussed above.

4. Speak with a special needs financial professional and create a team of professionals to assist you in planning. Once you have determined the current and future financial needs of your dependent with special needs, it’s important to pull together a support team that can help guide you through the variety of options available to you and your family. The composition of the team may vary depending on your situation, but it may include an attorney, a health professional, and a school guidance counselor, among others.

5. Contact local nonprofit organizations for additional resource support. Your local nonprofit may be able to provide resources that can help with planning or that supplement the standard services provided by government agencies. A good starting place is to first contact a nonprofit dedicated to your dependent’s special need.

6. Apply for government benefits. Government benefits – such as Medicaid and Social Security – may help provide for your dependent’s needs in the form of medical treatments and supplies, equipment, financial assistance and more. Visit your local Social Security Office (www.ssa.gov) to find out what benefits your dependent may qualify for; call or visit their website first to find out what documents you should have with you for your visit.

7. Prepare your Last Will and Testament (review and update periodically). A Will declares how you want your estate to be distributed and allows you to select a guardian for your dependent when you pass away. It may be especially important to prevent automatic asset distributions directly to a person with special needs, and to be cognizant to not leave your dependent with special needs any assets in excess of $2,000 (as discussed in number two above).

8. Consider Setting up a Special Needs Trust. This allows caregivers a way to provide for their dependent’s care and quality of life, without disqualifying them for federal assistance. Trusts can be set up either funded or unfunded, and must be overseen by a guardian – often the dependent’s caregiver and/or a bank trust officer. Funds can be contributed gradually over the years, or designated as a beneficiary of an inheritance of a life insurance policy. The money in the trust must be used to enhance the dependent with special needs quality of life, and can help to supplement standard services and benefits provided by government agencies.

9. Apply for guardianship and conservatorship; if applicable. Caregivers must apply for a guardianship or conservatorship to maintain legal control over financial and healthcare decisions once a dependent reaches the age of 18. This can take up to a year in some states, so it’s best to start this process when the dependent turns 17. There are different levels of guardianship and conservatorship available, depending on the dependent’s capabilities and needs. For example, a limited guardianship could be solely for financial or healthcare-related decisions.

10. Prepare a Letter of Intent. Although not legally binding, this document is important for providing direction for the person or persons who will care for your dependent with special needs, and should be stored with other vital documents, such as your Will. Thinks of it as a “letter to the caregiver” – it can cover day-to-day care issues such as what medical assistance is needed, as well as quality of life guidance such as what entertainment and activities should be provided.

A copy of these steps and the 2011 Torn Security Blanket study is available at MetLife.

Methodology

To contact the caregivers of dependents with special needs, the MetLife Center for Special Needs Planning worked with the GfK Custom Research North America to conduct an online survey. A total of 1,004 panelists agreed to participate in the survey, which was conducted from May to June 2011. The margin of error for this survey is 3.2%. In addition, researchers conducted 18 in-depth online interviews with caregivers of special needs dependents.

About The MetLife Center for Special Needs Planning℠

The MetLife Center for Special Needs Planning works with national non profits and individuals to help support the mutual goal of helping individuals with special needs. The Center is dedicated to helping families plan for the future of dependents with special needs. Helping you answer those questions, directing you to the right resources, and just being there as a resource and advocate for you, is an important part of what we do. If you’d like to find out more or you’d like to be referred to a local MetLife Special Needs Planner, please call 1-877-638-3375, or visit our website at MetLife.