Tips on special-needs planning

When Alexandria Nadworny talks about working with clients who are caring for family members with special needs, she starts with the basics.

“The language you use is important, which is why you always put the person first,” she said. “It’s not a disabled person; it’s a child with autism or a person with mental health concerns.”

Ms. Nadworny, a member of the special-needs team at Shepherd Financial Partners, has a 27-year-old brother with Down Syndrome.

Speaking Monday in St. Louis at the XY Planning Network annual conference, Ms. Nadworny emphasized some basic do’s and don’ts that have helped her firm specialize to the point where half the practice is dedicated to special-needs planning.

“You have to help the family strike a balance to make sure they are taking care of their own needs in addition to the needs of their family member with a disability,” she said. “Plan for the knowns first, including what the parents need to achieve their goals, then plan for different scenarios.”

(More: Fidelity launches savings plan for disabled children)​

Unlike traditional planning strategies, Ms. Nadworny said that when a disabled dependent is involved, it involves “planning for two generations,” planning up to the eventual death of the parents and then to the death of the dependent with a disability.

“When dealing with a child with special needs, you can’t calculate anything,” she said. “You need to help families to be able to prioritize different goals, and if they don’t have enough resources, find out what else can be done to intensify the resources of government benefits.”

For example, she pointed out that between the ages of 3 and 22, the dependent is entitled to education, which is a benefit and resource that expires and changes at various stages.

“Maximize the benefits, especially between age 18 and 22,” she said. “Age 18 is a huge pressure point because the child is no longer a child, the parents’ assets no longer count toward the child and at 22, the person is likely assigned to a state agency. So you need to be aware of the benefits and resources.”

(More: Careful planning needed for families with special-needs children)​

The legal aspect of helping clients care for a child with special needs begins with a special-needs trust, Ms. Nadworny said.

“In the old days, parents would leave everything to another child and expect that sibling to take care of the special-needs​ child,” she said. But an “obligated gift” can cause problems ranging from tax issues to moral dilemmas.

“Do the estate planning with a qualified special-needs attorney,” she said. “And keep in mind that what’s equal is not always what’s fair, and what’s fair is not always what’s equal.”

In terms of establishing guardianship as parents get older, Ms. Nadworny noted that there are levels of guardianship that can severely limit the rights of the person with the disability.

“I suggest always taking the least restrictive guardianship possible,” she said.

When it comes to government benefits, Ms. Nadworny said special-needs planning means becoming familiar with what is available at both the state and federal levels, and then encouraging clients to contact their elected officials and push for better programs and more funding.

(More: A special need for financial advice)