Special Needs Families Of All Incomes Need Financial Planning

Adam Beck

February 24, 2016

For working parents raising a child with special needs and struggling to get by, affording a financial adviser seems like a luxury, but is often highly necessary.

Among the faculty at The American College of Financial Services, a recent topic of significant discussion has been how we should view financial services as a profession, rather than an “industry.” Using your hard-earned talents and expertise to serve those without financial means is among the hallmarks of most major professions, including law and medicine. Within the financial planning profession, many organizations, agencies and individual planners take pride in working with certain clients and community groups at no charge.

Perhaps in no sector of the profession is this more necessary than special needs planning. Among far too many families with children living with special needs, there is a critical need for professional planning and guidance, but these families lack the financial resources to afford a financial adviser. We must strive to expand the number of low-income special needs families who benefit from this profession.

One of the most profound illustrations of this need comes from the Catalyst Center at the Boston University School of Public Health. Seven years ago, they published a report titled “Breaking the link between children’s special health care needs and financial hardship.” The report focuses on the need for reforms to the nation’s health care system that specifically assist children with disabilities living near the poverty line. In other words, the special needs children of the working poor. Many of the issues highlighted by the report have been ameliorated or even eliminated by the Affordable Care Act, enacted a year after the report came out. However, special needs families of lower incomes still face the majority of struggles discussed. And for families living in states that have opted not to expand their Medicaid program, the very same obstacles to financial and health security remain.

Among the families profiled are the Wilsons of Little Rock, Arkansas. Their child, Hunter (then age 9), is deaf and also suffers from an antibody deficiency. Hunter’s mom, Amy, had been an EMT, but became what she described as “forced poor.” Even if she was able to hold a work schedule in between Hunter’s need for care and frequent hospitalizations, earning income would cause her family to surpass the Medicaid limit. Her husband, Tim, works two jobs to support the family of five. The Wilsons face extra financial expenses as a direct result of Hunter’s condition (such as a $300 per month electric bill to run the variety of equipment he needs to stay alive), but also difficult financial choices.

A professional financial adviser - namely one holding the Chartered Special Needs Consultant™ (ChSNC™) designation - would be able to help the Wilsons a great deal. They could work to establish a special needs trust that would enable additional income while preserving Medicaid eligibility. They would be able to identify programs and services in the area of which the Wilsons could take advantage. With Tim Wilson as the sole wage-earner, his premature passing would be a devastating loss. A financial planner would be able to find a life insurance policy that could save the family in the event of losing a father. They could help establish a budget that reduces the difficult choices - such as paying the electric bill or the car bill. And they could help the Wilsons maximize any tax credits and deductions so they can keep more of what they earn, to benefit all three of their children.

There are families like the Wilsons in every community in America. Working hard - indeed, working multiple jobs - just to get by and struggling to pay for the necessary care for their child who happens to have a disability. A 2011 study found that the overwhelming majority (62 percent) of families who care for a special needs child do so with household incomes below $50,000. Some may be able to afford a financial adviser, while many would likely never be able to afford one or even think of consulting a professional. As a profession, we need to change that and encourage advisers - particularly special needs planners - to dedicate a portion of their work to assisting the working poor with their financial needs as they raise a child living with special needs.