If you want the lowdown on the importance and use of a Special Needs Trust (SNT), listen to Nadine Vogel, president of Springboard Consulting LLC and Brian Finn. Approximately 10 years ago, Nadine created MetDESK® at Metropolitan Life Insurance Co. (MetLife) and today, Brian runs it.
Her life changed after having, from birth, two daughters with special needs. Her response was to advocate, and later she found a MetLife division to address financial, legal, and social issues of parents with such children.
Make no mistake; Vogel is no “Hannah Montana” Radio Disney teen idol as a high school student and a rock star. Like any Wonder Woman mother, Vogel’s smart and fired up to fight for her kids.
‘Consume our lives’She has said, “My husband and I were shocked to find no single advocacy organization or professional association to help us navigate the maze of legal, financial, and medical issues that would consume our lives.” She admits most special needs families learn quickly to “put on boxing gloves every day and prepare to fight whomever to help.”
Her battle began on her own turf. She reached out to organizations handling special needs: schools, government agencies, nonprofits, etc. She filled a five-drawer cabinet with contacts, plus federal and state laws that affected her daughters and children like them. Then Vogel stretched the battle lines to include advocacy groups, government agencies, and overwhelmed parents, who requested speaking engagements nationally. She responded, felt empowered, was exhausted, and sought help.
In 1997, Vogel went, chutzpah in heart, to MetLife. Would it join the fight and set up a division to serve issues of parents like her? MetLife answered: draft a business plan outlining why it should fill a niche market with very complicated needs. She did so. In 1998, MetLife named her Vice President to head MetDESK®, its division of estate planning for special kids.
Two or moreAccording to the National Center for Health Statistics, as many as one in five households with children in the U.S. is caring for a child or dependent with special needs.
As a result, MetLife Inc. issued The Torn Security Blanket: Children with Special Needs and the Planning Gap. It states: “For most families, financial planning involves ensuring they have enough money to pay their bills while saving for their children’s college education and their own retirement. For parents of children with special needs, planning often takes on a very different—and more poignant—meaning, especially since 60 percent of parents don’t expect their special needs children to ever be financially independent.”
Despite recognizing they are likely to die before their children, 68 percent of parents haven’t written a will, and 29 percent have done nothing to plan for their children’s financial future.
The findings emerged from a survey of parents done by MetLife’s Division of Estate Planning for Special Kids, MetDESK®. “The need to address the long-term care of special needs children is pressing. The U.S. Census Bureau estimates that more than one in 10 Americans between the ages of 16 and 64 suffers from some form of physical, mental, or emotional impairment.”
Vogel left MetLife approximately two years ago to form Springboard Consulting LLC, which works with Corporate America on how to appropriately market their products and services to this segment of the population as well as support these folks in the workplace through Diversity, Work-Life and Human Resource initiatives. Finn is now the assistant vice president of the MetDESK program.
Future eligibility MetDESK®, which is MetLife’s Division of Estate Planning for Special Kids launched in 1998 as one of the first programs of its kind in the financial industry and focuses on the concerns of families with children or dependents with special needs. Finn notes MetDESK specialists, who don’t charge fees for the advice they provide families who have children or dependents with special needs, can help families address critical issues. They include how to protect future government eligibility and ways in which a Special Needs Trust can provide lifetime care.
About 70 percent of MetDESK’s representatives are parents of children with special needs or have close relatives with special needs.
Finn stresses there are “stringent training requirements for MetDESK specialists to keep them up-to-date with federal and state laws.” Financial services representatives and financial planners who go through the program learn the legal and financial complexities in estate planning. “There are continuing education requirements, so they’re updated on changes and developments that could affect their client’s situation.”
The MetDESK specialists travel around the U.S. to conferences and small support groups to “educate families for free,” Finn adds, “And interested families sign up for individualized information specialist. A specialist will refer families to social support groups and other services in their community.”
‘More complex’ Finn says MetDESK’s task is “infinitely more difficult and complicated” than life-planning needs of a regular individual. “It entails countless services and issues. We go about it through education.” Also, MetDESK® specialists don’t inquire about family needs and future plans. They spend hours educating families on laws and services that “make their needs more complex than they probably ever imagined.”
Then come advice and referrals covering support resources, education advocates, nursing services, and community organizations that serve children with special needs.
MetDESK® must be expert at estate planning, have a volunteer work background or serve on the board of a nonprofit, and be in business for at least three years before joining MetDESK®. Financial planners can have no more than two customers lodge complaints against them over their entire career.
USA TODAY financial news columnist Sandra Block noted most parents of special needs children realize their children probably will outlive them, “yet nearly a third have made no plans for their child’s financial future.”
‘Serious risk’While 60 percent of parents said their special needs child will require lifetime care, the “majority haven’t even prepared a will,” says Finn. According to AARP, “Without a plan, your financial future and the welfare of those you care about are at serious risk. No government agency or private organization is going to take responsibility for your family’s well-being.”
Massachusetts Mutual Life Insurance Co. (MassMutual) notes a SNT allows a donor, usually a parent, guardian, sibling, or spouse to set aside funds in trust so that money for specific purposes is available for the loved one after the death of the donor. It can be set up to “send a child to camp, take vacations, travel to visit relatives, buy sports equipment, or to pay for other therapeutic needs which don’t fall under day-to-day living or ‘maintenance’ expenses.” If established properly, MassMutual asserts “distributions from a [SNT] will not jeopardize a beneficiary’s entitlement to receive governmental assistance, such as Medicaid or Supplemental Security Income.”
For a child with special needs, poor financial planning can “lead to catastrophic consequences.” Block says: “If you die without a will, your child may inherit some or all of your estate. A disabled individual with more than $2,000 in assets is ineligible for most government benefits, such as Supplemental Social Security and Medicaid.” Ron Pearson, a Virginia Beach, Va., financial planner and father of two adult sons with developmental disabilities, says housing and medical expenses for a disabled adult who lives in a group home typically exceed $50,000 a year. To generate enough annual income to meet those costs, you would need a minimum of $1 million in savings.
ComponentsAdvocacy groups, such as The Arc of the United States, urge using qualified professionals. SNT important components include:
MetLife sees the No. 1 advantage over a direct gift or inheritance is that, if arranged properly, SNT assets “don’t belong to the beneficiary.” The SNT holds title to property to benefit a child or adult with a disability and can be used to provide for their needs and supplement benefits from various governmental assistance programs.
Peace of mindTypically, a SNT provides: eye glasses, annual independent check-ups, transportation (including vehicle purchase), equipment training programs, maintenance, education, insurance (including payment of premiums), and rehabilitation. It may allow a trustee to give the beneficiary money for: entertainment (e.g., movies), electronic equipment, trips/vacations, computer equipment, athletic training and competitions, companion services/home health aide, items to enhance self-esteem, and higher quality of medical or dental care provided by any local, state, or federal agency or any private insurance policy (where it is clearly supplemental),
A SNT can hold cash, stocks, personal property, and real property. It can own and/or be the beneficiary of life insurance. SNTs can be used to protect personal injury settlements or judgments from jeopardizing government benefit eligibility.
Most importantly, a SNT can help parents coordinate their estate plans and provide peace of mind that their child will be provided for when they can’t do that.
In his wheelchair in Jacksonville, FL, Herb Drill heads Able Me & Associates. His e-mail address is herbdrill@ableme.com. He has Muscular Dystrophy.
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