Taking Care of a Family Member With a Disability

September 1, 2020
Taking Care of a Family Member With a Disability

It can be overwhelming to figure out how to create a wealth plan that helps you achieve all of your family’s goals, including taking care of a child or other family member with a disability. Consider working with a wealth advisor who can help you plan for today and the future.

Q: How do I integrate financial planning for a child with a disability with my overall financial plan?

A: It may help to break your overall financial plan into categories starting with creating a multigenerational cash flow plan to help manage expenses for the child and the rest of your family. Put an estate plan in place that includes guardians for your child, as well as a trust to help ensure expenses can be covered even after you die. Review your insurance and put the appropriate income replacement policies in place to help protect your family and your assets. Review government programs available for your child who has a disability to make sure you’re taking care of all of the resources available. Plan for all of your financial needs including retirement, funding college tuition for siblings and building up savings for emergencies. Ultimately, your overall plan should account for all of your short- and long-term goals.

Q: Which professionals should be on my planning team?

A: When you’re working on a financial and life plan for a child or other family member with a disability, it takes a village of ongoing support. Think about having these professionals on your team in addition to your wealth advisor: extended family, friends, school staff and administrators, social workers and organizations that advocate for individuals with disabilities, doctors and medical support staff and a CPA who can work with your advisor on a tax-efficient financial strategy for you and your family.

Q: What’s the difference between Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI)?

A: If an individual has limited income and resources, he or she may qualify for Supplemental Security Income (SSI), which provides minimum basic financial assistance to older adults and persons with disabilities (regardless of age). This federal benefit offered via the Social Security Administration is often supplemented by state programs.

Social Security Disability Insurance (SSDI) supports individuals who are disabled and have a qualifying work history, either through their own employment or a family member (spouse/parent). The major difference between the two is that SSI determination is based on age/disability and limited income and resources, however the SSDI determination is based on disability and work credits. In addition, in most states, an SSI recipient will automatically qualify for Medicaid. A person with SSDI will automatically qualify for Medicare after 24 months of receiving disability payments (Individuals with amyotrophic lateral sclerosis [ALS] are eligible for Medicare immediately.).

Q: What do I need to know about saving for college?

A: You have a couple of options. You can invest in a traditional 529 plan, which might be the best option, depending on the nature of the disability and prospects for employment. Or, you can invest in a 529 ABLE Plan, in which the funds also grow tax free. Funds can be used for eligible disability expenses but there are Medicaid paybacks, and you can only fund it up to $100,000 if you/your child is also collecting SSI.

Q: What are some of the potential tax deductions or credits I would be eligible for?

A:  You may be able to get a tax deduction for schools, equipment, home updates for accessibility purposes and travel, and expenses for conferences related to diagnosis. You may be able to receive tax credits for child and dependent care, a credit for elderly or individuals who have disabilities and a child tax credit. Be sure to consult with your tax professional to help maximize your deductions and credits.

Consider Partnering With Your Advisor

Work with Mariner for assistance with tax and overall wealth planning to take care of your whole family, including a long-term plan to protect a child or other family member with a disability. Our professionals are under one roof, so your advisor can bring in the tax and estate planning team when needed to help meet all of your goals.

Learn more about wealth management for families with loved ones who have disabilities.

“SSI vs. SSDI: What Are These Benefits and How Do They Differ?” National Council on Aging Blog.

This article is limited to the dissemination of general information pertaining to Mariner Wealth Advisors’ investment advisory services and general economic market conditions. The views expressed are for commentary purposes only and do not take into account any individual personal, financial, or tax considerations. As such, the information contained herein is not intended to be personal legal, investment or tax advice or a solicitation to buy or sell any security or engage in a particular investment strategy. Nothing herein should be relied upon as such, and there is no guarantee that any claims made will come to pass. Any opinions and forecasts contained herein are based on information and sources of information deemed to be reliable, but Mariner Wealth Advisors does not warrant the accuracy of the information that this opinion and forecast is based upon.  You should note that the materials are provided “as is” without any express or implied warranties. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

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