As a father of two kids with autism spectrum disorder, I know how anxious parents can be simply walking their kids into a restaurant. Unless you’ve been around people on the spectrum, you may have no idea why they’re called the “invisible” population. Outwardly, ASD presents differently in different people. It can be difficult for others to tell from how someone looks how and why they have problems managing sensory or social overload.
Parents often find themselves racing against time to create a plan for that child. As a financial advisor who specializes in advising client families with special needs, the biggest obstacle I encounter with such families is that they think they can manage everything on their own.
Take it from me — they can’t.
About one in 36 children has been identified with ASD, and it cuts across all racial, ethnic and socioeconomic groups. Only about 29% of Americans of working age with disabilities participated in the workforce pre-pandemic, compared with 75% of Americans with no disability. However, the share of disabled adults who are working soared to 35% between 2020 and 2022 as employers recognized the benefits of hiring more diverse workers.
Still, most autistic individuals depend on others for financial support over their lifetimes. It’s a sizeable nut. The lifetime care, housing expense and day-to-day living and transportation support can total $1.4 million to $2.4 million, according to Autism Speaks, an ADS advocacy group.
Elements of a Special Needs Financial Plan
Many parents coping with the daily activities of caring for an autistic child don’t know what planning questions to ask or know where to turn for help. When I meet them, they will sometimes ask, “Charlie, what can you do for us that’s different from other families?” The difference comes down to emphasis and empathy. I use the example of two sets of 40-year-old couples, one with a disabled child and one without. The latter has a long investment runway and can afford to take more market risk. The former would not be able to withstand a 30% or 40% bear-market loss. They’ll need to walk a finer line between minimizing short-term risk and getting some growth to be able to support their child’s long and emotionally challenging journey.
I work hand-in-hand with both types of clients to create a long-term vision for the future. I break down individual family members’ goals into discrete, manageable buckets. But the special-needs buckets, given the uncertainty of time horizon, often look very different. Clients may want to consider the following approaches:
- Government assistance: The easiest financial support for disabled persons to receive may be Social Security Disability Insurance and Social Security Insurance. SSDI pays benefits to certain family members if they’ve worked long enough and paid Social Security taxes. SSI pays benefits to adults and children who meet the Social Security Administration requirements for a qualifying disability and have limited income and resources.
States have their own programs that provide a wide range of support services for disabled individuals from pre-school through secondary school (generally until age 21). The funding challenge for families with special needs comes when the disabled person reaches 21, when school-district support dries up. Families must then either pay out of pocket or apply for federally funded programs available through Medicaid waivers (this is called self-direction).
Many folks don’t realize that government assistance is available to families of all means. The qualifying test for Medicaid doesn’t factor in family income or assets, but rather the capabilities of the disabled individual. The level of available support depends on whether people can safely live at home, on their own or in a group setting.
- Life insurance: When it comes to life planning for an autistic child, a family may face a significant funding gap. There are few better options for closing that gap than life insurance. My life policy should take care of most of my boys’ ongoing needs after I’m gone. My advice to clients is to buy as much insurance as they can afford, and buy it early, when it’s less expensive.
- Special needs trust: For clients who want to provide for a disabled child without putting eligibility for certain public benefits programs such as Medicaid, SSDI or SSI in jeopardy, a special needs trust may be appropriate. A special needs trust, which has no asset limit, restricts the beneficiary’s own access to the assets in the trust to the extent that the assets are not considered legally available to the beneficiary. An investment fiduciary can play a critical role in advising the trust assets and seeing that the donor’s wishes are carried out.
- ABLE accounts: State-sponsored ABLE (Achieving a Better Life Experience) accounts also allow disabled people to save and invest up to $100,000 without losing eligibility for governmental benefits. Earnings in an ABLE account are not subject to federal income tax, so long as the beneficiary spends them on “qualified disability expenses.”
Clients Need Self-Care, Too
When airplane cabin oxygen drops, you place your mask over your nose and mouth before assisting others. The same applies to families who are trying to navigate the complex and all-consuming world of special needs. Parents barely have time for their own personal, emotional and financial needs. They need the time, space and resources to live their own lives as best as they can.
I also cannot overemphasize the importance of having the right team in place to guide clients safely through the complex world of special needs planning. A client may name a beloved, trusted aunt or uncle as trustee for their special needs child. But are they up to the task and responsibility of managing the complex tax, legal, investment and accounting requirements needed to oversee that child’s care? Clients are well advised to select a knowledgeable fiduciary to handle the myriad aspects of overseeing their child’s care over their lifetime. It can offer great peace of mind knowing that their day-to-day living needs will be provided for long after they’re gone.
April is Autism Awareness Month. Charlie Massimo is a Senior Vice President and Financial Advisor at Wealth Enhancement Group who works with affluent physicians, business owners and families impacted by autism. He is the founder of Autism Communities, a not-for-profit organization that helps provide homes to facilitate an independent, safe and inclusive living environment for adults with autism.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
