Planning with a special purpose

When Jeff and Amy Mordaunt’s son Drew was diagnosed with autism 17 years ago at age 3, it didn’t come as a huge surprise. With a background in special education, Amy began recognizing developmental delays when Drew was 18 months old, and promptly enrolled him in early intervention programs to get him the support he needed.

At home in Cleveland, Ohio, Drew participated in hours of treatments and therapies each week. As he got older, he eventually moved from his public school to one geared toward students with autism, where he thrived for years until his recent graduation.

When now-20-year-old Drew transitioned from high school into adulthood, the Mordaunts realized they needed help to better prepare for their—and Drew’s—financial future.

Even though they had been working with a financial advisor or several years, they had more questions than answers when it came to planning for Drew. “We didn’t have anything in place that I felt we should’ve had in place,” Amy says.

About a year ago, Thrivent Financial Advisor Hannah Magrum met Jeff when they were both serving on the board for Integrated Community Solutions, an Ohio nonprofit dedicated to building communities for people with developmental disabilities.

In working with the Mordaunts this past year, Magrum took a holistic look at their finances and set up a plan that considered the whole family’s needs. The Mordaunts achieved some of their long-term planning goals to more effectively use Drew’s special needs trust and navigate government systems to maximize their son’s benefits.

From working alongside your attorney to create an estate plan to applying for government benefits, a financial advisor can help you with special needs planning so you feel confident in money decisions for yourself and your loved one with a disability. Here’s how to get started.

When it comes to planning for those with special needs, it’s crucial to pull together a team who understands the unique estate planning to-dos, government benefits and waivers, and disability resources and programs.

Magrum is a Chartered Special Needs Consultant (ChSNC), the only credential specifically designed to prepare financial advisors to help plan for people with special needs. This designation has been an asset to Magrum’s clients, like the Mordaunts, but also for her own family. Her 9-year-old son has two ultra-rare chromosome abnormalities, and Magrum herself uses a wheelchair, the result of a genetic condition discovered when she was pregnant with her third child.

“I’ve not only been an advocate for my clients, but an advocate for my family,” Magrum says. “I am very aware, on a personal level, of the struggles families might face when they don’t know what they don’t know. I know what it’s like to feel very lost and not know what to do, where to go for support and resources. It’s my goal that families don’t feel that same sense of uncertainty.”

A personal connection is the same reason Thrivent Financial Associate Meagan Matich pursued her ChSNC designation. Her longtime friend and now colleague, Amber Bluhm, has a 14-year-old son with autism. Knowing the hurdles Bluhm’s family faced in finding resources and support, Matich wanted to become a hub of information for clients who have loved ones with disabilities—and she recruited Bluhm to join her team.

“There are a lot of what-ifs in life,” says Matich. “Our job is to try to think of all the what-ifs and put a plan in place that could cover all of that.”

Leroy Eickhoff wanted to make sure his high school sweetheart and wife, Pamela, would be set if she
outlives him.

In 1990, Pamela was diagnosed with the genetic disease Von Hippel-Lindau syndrome, which causes usually benign tumors to grow in certain parts of the body. In the years since her diagnosis, she has had 19 surgeries to remove these tumors. Some complications following a brain surgery in 2017 led to meningitis and the Alzheimer’s-like symptoms she experiences today, such as confusion, hallucinations and coordination problems.

Ahead of Leroy’s retirement this past fall, he met with Matich, Bluhm, Nancy Hansen, all members of Redwood Financial Advisors in Redwood Falls, Minnesota, along with his Thrivent Financial Advisor Greg Bonow, to learn about programs available to Pamela and strategies for setting aside money if he dies first. “Nobody plans to fail; you fail to plan,” says Leroy, who lives in Wykoff, Minnesota.

While every family and situation is different, Magrum stresses the importance of having an estate plan in place as early as possible. “Reactive planning is much more limited than proactive planning,” she says. These estate planning to-dos should be considered in all special needs planning:

• Make sure you have a will in place and it’s up-to-date.
• Decide if a guardianship or power of attorney designation is appropriate if your loved one with special needs is older than 18, and determine who will take your place if you pass first.
• Establish a special needs trust and appoint an experienced trustee who can manage the assets.
• Plan for how to legally pass down money and assets by ensuring beneficiaries are named on all accounts and up-to-date. “The largest mistake I see is when a family hasn’t established the appropriate legal tools to leave money to their child with disabilities,” says Magrum.

People with disabilities can qualify for government benefits like Supplemental Security Income (SSI), a federal program that provides money for basic living expenses, and Medicaid, a state and federal program that covers the cost of medical care.

Each state also has its own Medicaid waivers for disabled people to receive additional resources and support, such as personal care services, respite care and adult daycare.

The biggest drawback of these government benefits is the asset limit—typically, an individual who is on SSI can’t possess more than $2,000 in assets. Medicaid asset limits vary by state.

This can get tricky if you plan to leave your estate to a loved one with a disability, and it demonstrates why it’s essential to work with a financial advisor who is well-versed in government disability benefits and can help you come up with a workaround.

“A lot of clients don’t realize the importance of titling their beneficiaries appropriately,” says Mike Guizzetti, advice services consultant at Thrivent. “Even though they may be well-meaning, leaving assets to someone could potentially cause them to no longer be eligible for certain governmental services.”

Creating a financial plan for yourself and a loved one with a disability can feel overwhelming, but with a solid support network, you don’t have to go it alone.

Build your team

This includes professional support—like your financial advisor, tax advisor, attorney and disability caseworker—but also friends and family.

Find your community on social media

There are thousands of support groups dedicated to many different disabilities. Connecting with others going through similar experiences may help you feel less isolated.

Reach out to local nonprofits

These organizations can connect you with resources and support in your area.

Despite asset limits imposed on government benefits, legislation over the past 10 years has made it easier for people with disabilities to create a life for themselves without being disqualified from their essential programs.

The Achieving a Better Life Experience (ABLE) Act of 2014 made it possible for people with a disability with an age of onset before the age of 26 to open a tax-advantaged savings account for up to $100,000 without losing their SSI benefits. An ABLE account can be used to pay for expenses like housing, education and training, transportation and assistive technology, as well as financial management and legal fees.

“Your quality of life shouldn’t diminish because you have a disability,” says Bluhm. “Let’s say you work, and now you have to spend an extra $1,000 a month just to stay on your program. Maybe you want a car or maybe you want to save up for your own home. You can save for those things without being reprimanded and forced to live in poverty.”

Another savings option that doesn’t affect government assistance is a special needs trust that allows you to transfer assets to your loved one with a disability. Special needs trusts are classified either as first-party—in which the trust is funded with assets from the disabled individual, such as from an inheritance in their name—or third-party, funded with assets from other loved ones, like proceeds from a life insurance policy or retirement account. Both are administered by a trustee and should be used for the expenses that aren’t covered by government benefits.

No matter where you’re at in navigating a diagnosis—and whether your loved one with a disability is your child, spouse or another family member—working with a financial advisor can help you feel heard and supported through the process of special needs planning.

“I know my designation is Chartered Special Needs Consultant, but as a disabled person, I wish it was titled something different because there’s nothing ‘special’ about what I need or my son needs. I just want more ramps to get into places,” says Magrum, noting that her disability is a motivating factor in her career. “I want to leave this world a more accessible place for my son, for my children’s children. I feel called to and passionate about making a change, making a difference, serving these families.”

When it comes to financial planning for your loved one with special needs, your financial advisor is a crucial member of your support team. Mike Guizzetti, advice services consultant at Thrivent, makes the following suggestions when you plan to meet with a financial advisor.

• List of assets, including bank accounts, property, life insurance policies and retirement accounts.
• Beneficiary designations, including their full legal name, address, date of birth, Social Security number and relationship to you.
• Names and phone numbers of any other professionals—like attorneys or case managers—you want your advisor to speak with on your behalf.
• Information on any government benefits your loved one with special needs is already receiving.

• Tell me about your experience, education and/or credentials related to special needs financial planning.
• Can you recommend—and work with—tax professionals and lawyers as needed?
• Are you able to address all of our financial planning needs? If not, are you part of a team that can help me?