Contents Contents of the Accompanying CD-ROM...................... xii About the Authors........................................ xiii Foreword Marty Wyngaarden Krauss........................ xv Preface................................................ xvii Acknowledgments........................................ xix Introduction............................................. xxi 1 The Special Needs Planning Timeline................... 1 Comparing Traditional Financial Planning with Special Needs Planning The Key Stages of Special Needs Planning Stage I (Birth to Child s Age 3) Stage II (Child s Age 3 15) Stage III (Child s Age 16 21) Stage IV (Child s Age 22 and Beyond) 2 An Overview of Special Needs Planning.................. 9 Why it Is Important to Plan A Look at Special Needs Planning The Special Needs Planning Pyramid The Pyramid Foundation: Legal and Estate Planning A Firm Establishment: Insurance Protection (Risk Management) Special Considerations for Life Insurance in Special Needs Planning Income Replacement Important Supports: Cash Management and Spending Building Upward: Cash Reserves Structure for Life: Homeownership and/or Lifetime Residential Needs More Building Blocks Investment Planning College Planning Retirement Planning To the Point: Wealth Distribution Applying the Core Planning Points in the Five Factors of Special Needs Planning (Core Planning Poin v
vi Contents (Core Planning Points) (Core Planning Points) (Core Planning Points) (Core Planning Points) 3 Practical Steps in the Planning Process.................. 25 Understanding the Planning Process Striking a Balance First Component Planning for the Parents Needs Second Component Planning for the Child s Needs Third Component Integrating Parents and Child s Needs Basic Planning Steps Special Needs Planning Steps Step 1: Identify and Prioritize Your Goals Defining Traditional Goals Defining Special Needs Planning Goals Step 2: List Your Resources and Expenses Determine Your Personal Net Worth Determine Your Income Sources and Earnings Parents Income Sources Adjustments to Income Child s Income Sources Identify Public Resources Available Determine Your Expenses Family Needs Supplemental Cash-Flow Needs of the Child with Disabilities Supplemental Needs for Younger Children with Disabilities (Child s Birth to Age 15) Supplemental Needs for Transitioning Families (Child s Age 15 to End of School) Supplemental Needs for Older Families (Adult Child/Post School) Step 3: Identify Planning Gaps Step 4: Identify Strategies to Fill the Gaps Step 5: Implement a Coordinated Plan of Action Step 6: Periodically Review and Monitor Your Plan 4 The Five Factors to Consider in Special Needs Planning.... 55 Pulling the Pieces Together Family and Lifestyle Values The Extended Family Siblings Careers
Contents vii Emotional Obstacles to Planning Times of Family Crisis Emotions as a Catalyst Denial Can Delay Diagnosis and Planning Challenges Couples Can Face Your Family s Financial Values or Standards Bringing Family Members into Your Discussions Maximize Eligibility for Government Benefits Understand Where You Are and Where You Would Like to Be Create a Plan Estate Planning Guardianship and Less Restrictive Alternatives The Special Needs Trust Legal Settlements Structured Settlements versus Lump-Sum Payments Entitlement Benefits Public Benefits Public Programs Special Education Services Through the Individuals with Disabilities Education Improvement Act Early Intervention Services Special Education Benefits Social Security Benefits Social Security Disability Insurance Supplemental Security Income The Medicaid Program How to Obtain Services or Funding for Your Loved One The Difference Between Service and Support The Life Cycle of Services and Supports Birth to Age 3 Age 3 to Adolescence Age 22 Years and Beyond Advocacy 5 Planning for Stage I Child s Birth to Age 3.............. 97 General Description of Stage I Unique Planning Steps for Stage I
viii Contents Using Case Examples as a Helpful Guide Case Examples for Stage I The Brown Family: Building Security The Murphy Family: Gifting from Grandparents 6 Planning for Stage II Child s Age 3 15................ 123 General Description of Stage II Unique Planning Steps for Stage II Case Examples for Stage II The Stein Family: Financial Independence and Legal Settlements The Smith Family: Maximizing Government Benefits
Contents ix 7 Planning for Stage III Child s Age 16 21.............. 149 General Description of Stage III Unique Planning Steps for Stage III Case Example for Stage III The Cooke Family: Planning as a Single Parent 8 Planning for Stage IV Child s Age 22 and Beyond....... 167 General Description of Stage IV Unique Planning Steps for Stage IV Case Example for Stage IV The Barry Family: Creating Housing Options
x Contents 9 Important Special Needs Planning Tools and Resources... 197 Estate Planning Tools Wills The Letter of Intent Powers of Attorney Trusts Irrevocable Trusts Charitable Trusts Types of Trusts Used for an Individual with a Disability Supplemental Discretionary Trusts Discretionary Trusts Funding the Special Needs Trust Funding the Special Needs Trust Upon Death Funding the Special Needs Trust During Your Lifetime Trustee Standards and Practices Collecting the Trust Property Protecting the Trust Assets Properly Investing the Trust Assets Keeping Accurate and Complete Financial Records Providing an Account to the Beneficiary and Others Preparing Income Tax Filings Successor Trustees Trust Advisor Removing a Trustee Trust Distributions Trustee Fees Time and Billing Records Trustee s Personal Liability Legal Standards Investment Losses How Trustees Can Protect Themselves The Surety Bond Estate Tax Considerations Retirement Planning Tools Retirement Accounts Traditional Individual Retirement Accounts Roth Individual Retirement Accounts Beneficiary Designations on Retirement Accounts
Contents xi Pension Plans Income Stream versus Lump-Sum Benefit Insurance as Risk Management Health Insurance Insuring Property Insuring for Loss of Income Disability Insurance Long-Term Care Insurance Life Insurance How Much Life Insurance Is Necessary? Negotiable and Non-Negotiable Needs Types of Life Insurance Federal and State Programs State-Funded Health Care Long-Term Supports or Care Through Medicaid Personal Assistance Services Family Support Social Security Benefits Obtaining Services Bibliography............................................ 243 Glossary............................................... 249 Appendix: Letter of Intent................................. 263 Index.................................................. 293
Contents of the Accompanying CD-ROM The Special Needs Planning Guide: How to Prepare for Every Stage of Your Child s Life features a CD-ROM containing printable and modifiable versions of the following components, provided in PDF and DOC files: About the Authors About This CD-ROM Personal Special Needs Timeline Current Budget and Expenses Worksheet Estimated Monthly Supplementary Expenses Letter of Intent xii