REPOST: Financial planning for families of children with autism

For families of children with autism, financial planning may be the least of their concerns especially when faced with day-to-day struggles. However, making financial arrangements can benefit families, explains Jennifer Cerbasi in the FoxNews report below.

Image source: foxnews.com

The list of priorities for families of children with autism is long: Doctors' appointments, speech therapy sessions, social skills groups, and Individualized Education Program (IEP) meetings are just a few of the items on the agenda.

Families are often focused on the here and now – what's best for their child's development today. The future is filled with unknowns and these day-to-day struggles often overshadow long-term plans, which may be difficult to think about.

The considerations are many, including basic logistics, such as housing, living expenses, and income, in addition to therapies, social groups, and activities or programs that may improve an individual's overall quality of life.

"As parents, we fight for the best IEP for our child, which leads to the best quality of life. Financial planning serves the same purpose," said Clark Crawford, vice president of sales and new business at Volios Group in New Jersey, and father of a child with an autism spectrum disorder.

For Crawford, the essentials when it comes to planning include a will, which dictates proper guardianship of the surviving children; a special-needs trust, which may fund both the necessities and any extra services; and insurance plans to provide for the family in case of a crisis. A sound plan needs to take unexpected deaths into account, he added.

"We talk about financial and insurance planning for the long term. What about a 6-year-old with autism who is left without parents?"

A family’s current financial situation and dynamics are important factors to consider when planning, but a crucial factor is the independence level of the child with autism. Some children with autism spectrum disorders’ (ASD) academic skills that are at or above their grade level, but exhibit deficits in other areas, including social, emotional, and problem solving skills.

"With just an insurance plan, a check may be issued to a child who is not prepared to manage it," said Crawford.

Bruce Maier, Financial Consultant for AXA Advisors, said when he initially sits with a family, he presents the idea that they are planning for two generations.

"Every family and situation is different. Every child with autism is different. The personalization of the plan is so important,” Maier said. “We talk about 'What keeps you up at night?' Granted, everything will keep you up at night when you have a child with special needs, but that question helps us focus on the priorities."

According to Maier, families of children with special needs are used to working with a team of professionals and should consider a financial planner another member of the team. On the other hand, he understands why people put off meeting with a financial planner or an insurance agent, and in turn, discussing guardianship.

"Parents may not be ready to have that conversation," but, he added, by planning and putting some of the pieces in place, "You can approach the potential guardian and say 'I know this is a difficult thing to assume, but I've made some financial arrangements that may make the situation more comfortable.’"

Though financial planners and insurance agents know their products well, it's the parent of the child with ASD who truly knows the ins and outs of daily life. To that end, Maier suggests that in addition to any legal documents and plans families may put in place, parents write a letter of intent, documenting all the details of caring for their child with special needs, including medications, daily schedules, and favorite toys, movies, or activities.

"For example, if every time Johnny goes to the pediatrician, he gets a red lollipop -- and it has to be red -- that can really make or break a situation," said Maier.

Knowing that many children with autism follow specific schedules or have very unique preferences, a letter of intent, though not a legal document, may ensure vital information is passed on to those now caring for the child.

Douglas O. Baker of Los Angeles, California, is a Special Needs Advisor and, like Crawford, is a father of a child with ASD. Baker said parents should to work with someone they trust, as he has come across his share of professionals who don't necessarily have the child's best interest in mind, or don't listen to the family’s needs.

"Parents have to be wary of agents poaching special needs families, simply trying to sell a product,” said Baker. “Families drop their policy after a year because it didn't make any sense."

Baker said he focuses on helping families create a positive quality of life both parents and their children can enjoy now, as well as planning for the future. In addition to financial planning, he assists families in navigating school and service systems, and likens himself to an air traffic controller or a quarterback, acting as a resource because he knows how overwhelming the decision-making process can be for a family.

"There are a lot of moving parts when it comes to having a child with autism,” said Baker. “You think birth to 21 years old is the hardest part; the longest stretch in your life with a special needs child is adulthood."

All three professionals highlight the importance of creating a plan that attends to the needs of the caregiver, whether it be the parents who are still living, or a guardian who steps in upon their passing.

"Parents are so used to focusing on the child with special needs, but if you do not think about yourself and your goals in the sense of risk protection among your assets, disability insurance, and your ability to maintain income, it becomes a catastrophic situation for a family of children without special needs,” said Maier. “It becomes an almost impossible situation for a family of a child with special needs."

With all of the components of raising and caring for a child with ASD, the financial aspect is one of the most daunting and overwhelming for families already inundated with decisions to be made. By meeting with a professional and evaluating the family's current and future state of affairs, parents of children special needs children may be able to take one thing off their very full plates.

I am Dana Ray Reynolds, a financial planner with more than 10 years of experience in the fields of risk management and tax planning. For more discussions on the various aspects of financial planning, like my Facebook page.

REPOST: 5 myths about disability insurance

One of the very common flaws in setting aside money for insurance is skewing the priorities of insurance coverage. As this article by Forbes.com’s Ashley Ebeling notes, many fail to put proper importance to accident insurance.

Image source: flickr.com

Shortly after putting out the group’s first pamphlet on how disability insurance can protect your family, Stephen Brobeck, executive director of the Consumer Federation of America, started offering it as a benefit to his employees. “That work [15 years ago] made me aware that I was being an irresponsible employer because we weren’t offering disability insurance,” he says, adding, “We feel pretty strongly that this is an important type of program.”

Brobeck is still trying to get the message out to other employers, and to employees, many of whom don’t even know whether or not they’re offered this benefit at work. Add it to your checklist for this fall’s open enrollment season when you sort through the benefits you’ll sign up for for next calendar year.

This week the Consumer Federation of America and Unum, the leading long-term disability insurance player by market share (16.2%), released a report based on interviews with 407 individuals who put in claims based on their employer group policies through Unum and have been on long-term disability for at least six months—or used to be. “The beneficiaries told us that disability insurance payments played an essential role in protecting their financial and emotional lives,” Brobeck says.

Long-term disability payments don’t replace your salary; they provide a buffer—usually 60% of your salary. That means that most recipients have to adjust their lifestyles and priorities: of those interviewed for the report, 85% cut back or completely stopped saving for retirement, and 58% skipped or delayed some medical, dental or vision care for themselves or family members.

Here are five myths about disability insurance the report debunks:

I doubt I’ll ever need it.

The Social Security Administration estimates that one in four 20-year-olds will become disabled and unable to work before they reach the age of 67. In 2012, more than 650,000 disabled workers received more than $9 billion in long-term disability benefits through employer-sponsored group disability coverage.

Worker’s compensation will cover me.

Worker’s comp replaces lost income if an injury or illness occurs on the job, but fewer than 5% of disabling accidents and illnesses are work-related. Most (90%) of long-term disability claims are for illnesses, not accidents. Vicki Burhenn, a Unum long-term disability recipient, from Lawrence, Indiana, went on disability in 2010 when her chronic obstructive pulmonary disease progressed so that she could no longer work as an office administrator at a mental health facility. “Emotionally, going on disability insurance was a Godsend, knowing I had the money coming in; it’s like going from drowning to taking a deep breath,” she says.

It’s a man’s problem. 60% of the Unum long-term disability recipients over the 2009-2012 time period were women.

I’m too young to worry about it.

41% of Unum long-term disability recipients over the 2009-2012 time period were younger than 50, with a third of those under 40. Dawn-Michelle Wyzard, a single mom in her 30s, from Clarksville, Indiana, counted on two rounds of disability payments when she had back surgery and needed time off from her job as a healthcare data processing administrator. “There is no way I could have survived the surgery financially without disability benefits,” she says, adding, “It helped me to not be stressed because I knew the money would be there.”

I can get coverage on my own.

Individual disability insurance, sold through financial advisors, is considerably more expensive than employer-sponsored coverage. Yet only a third of private industry workers have access to employer-sponsored coverage, according to the Bureau of Labor Statistics. Some employers pay 100% of the premiums; some share the cost with employees; and some offer it as a voluntary employee benefit, requiring the employee to pay 100% of the premium. Before you go on the individual market to try to buy a better policy, check if your employer gives you the option to “buy up” and add additional coverage.

For a policy comparison checklist from the Consumer Federation of America pamphlet, click here. (Note: Unum paid CFA $40,000 for their work in putting together the report; the recipients who were interviewed got $25 stipends.)

I’m Dana Ray Reynolds, a financial planner. Follow me on Twitter for more updates on intelligent money management.