Helping those who need it most: How to overcome the challenges of special needs planning
Estate planning is always important to the people involved, but it goes to a whole other level when it involves the future care of a child with special needs.
It’s an issue that generally doesn’t receive much attention in the media, although it got a boost this past week from Carolyn T. Geer’s “Investing Basics” column in the Aug. 3 edition of The Wall Street Journal Sunday (“Estate plans needing more than a will”). In it, Geer says there is a growing sense of urgency amongst baby boomers to get their estate plans in order, and it’s especially true for boomers who have children with disabilities. The column goes on to mention the importance of not only a will, but a Special Needs Trust (SNT) for those who have a child with a disability.
The SNT is often critical in these situations, because if assets were passed directly to the child with special needs, it would jeopardize the child’s eligibility to receive government benefits.
If difficulty in choosing a guardian is the reason many parents procrastinate in creating a will, the thought of planning for a high level of ongoing care for a child with special needs is especially daunting for parents, and even for many insurance agents and financial advisors who have little experience in this area.
This is troublesome, because there are a lot of families out there who need help in dealing with these eventualities, and they often don’t know where to start.
Insurance Forums recently interviewed a pair of experts from Ohio National to discuss the unique challenges – and how to overcome them – that agents and advisors face when working with families who have children with special needs.
Jessica Walker, JD, LL.M., Senior Advanced Sales Consultant at Ohio National, says the special needs client is typically in a delicate state, particularly if they are still coming to grips with the fact that their child isn’t going to have the normal life that they had always expected.
“They do need some extra love. They're overwhelmed,” Walker says. “They have a very personal issue and they don't want to be taken advantage of.”
David Szeremet, JD, CLU, ChFC, Second Vice President, Advanced Sales at Ohio National, says many of the agents he works with are reluctant to enter the special needs planning market, despite there being a huge need for agents who can help these families.
“They think, ‘I don't have a child with Down syndrome so I don't know how to speak to them.’ They're afraid. It's the same as the agents I work with who say, ‘Oh, I'm afraid to approach business owners.’ Well, you’ve got to jump in with both feet,” Szeremet says. “A lot of these folks who are in these situations, they talk to each other. They visit the same physicians, they go to the same websites, they're in the same support groups, perhaps. It's an unbelievable opportunity for referrals.”
Szeremet adds, “lots of these families need help and I think if you look at just about any study out there, they're not being approached. So I think there's an incredible opportunity.”
Indeed, there are probably more families who have children with special needs than you might think. According to the most recent survey from the U.S. Department of Health and Human Services, 14% of children in the U.S. have special health care needs, ranging from chronic developmental, behavioral, physical or emotional challenges.
The Individuals with Disabilities Education Act (IDEA), amended by Congress is 2004, defines a “child with a disability” as any child who has:
“mental retardation, hearing impairments (including deafness), speech or language impairments, visual impairments (including blindness), serious emotional disturbance […], orthopedic impairments, autism, traumatic brain injury, other health impairments, or specific learning disabilities.”
Consider these facts from Autism Speaks and the National Down Syndrome Society:
- Autism now affects 1 in 68 children, and 1 in 42 boys. It is the fastest-growing serious developmental disability in the U.S.
- There are more than 400,000 people living with Down syndrome in the U.S. Life expectancy for people with Down syndrome has increased from just 25 in 1983 to 60 years today.
Continued advances in medical care are creating a greater need for advance planning for parents of children with special needs. Children born today with Down syndrome, for example, are statistically expected to outlive their parents. While children with autism have a mortality risk nearly twice that of the general population due to risk of accidents such as drowning, the condition itself does not affect life expectancy. This makes the need for planning essential, and means that families of children with special needs typically have lifetime insurance needs now as opposed to what might have been temporary needs years ago.
- Do you work with families that have children with special needs? Please share your thoughts and advice about the unique challenges of this market on this thread in the forum.
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