0. Special Needs Planning
Welcome and thank you for joining me here today to talk about the very special planning needed to take care of the special needs person in your life - not only today, but into their future.
Special Needs Planning
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ALR (5.16)

1. MAKING THE FUTURE MORE SECURE
For Your Dependent with Special Needs
Our focus today is to help you learn what actions you can take to create a more secure future for your special needs dependent. Making a plan will give you peace of mind.

2. Take a Minute to Preview
You should all have a packet that contains: 1
A copy of the Presentation 2
An Evaluation Sheet
First, let’s take a minute to review materials ... You should each have a packet that contains a copy of this presentation and an evaluation sheet.
Please feel free to ask questions throughout the presentation ... I’ll let you know if a particular question will be answered in an upcoming slide. Otherwise, we will note the question to make sure we get it answered for you. We never want to miss a good question!
Please ask questions!

3. You’re the One …
… not the only one, but as the primary caregiver of a dependent with special needs, you’re the one who is looking out for their best interests. What happens if you’re not around?
For example, while other parents/guardians may worry about how they will pay for a college education ... the concerns of caregivers with special needs dependents extend far into the future; beyond today’s expenses, beyond college, into your dependent’s adult years and after you are gone. You may ask yourself, “How will I pay for all the care my dependent needs today, his or her expenses in adulthood, and how can I insure that my child will live well and thrive even if I were to die?”
Today we will discuss how to plan for your special needs dependent’s financial future.
As a caregiver of a dependent with special needs, the single most important issue on your mind, regardless of the age of the dependent, is what will happen to my dependent after I’m gone.
Who’s going to look after my dependent’s best interests?
Who’s going to step into my shoes?
Will my dependent be happy, healthy, secure and lead a life of dignity?

4. Are You in the Majority of Caregivers?
About 80% of caregivers are not familiar with the steps to plan for lifetime financial assistance for their dependents.
There are millions of families that can benefit from lifetime special needs planning.
Only 20% of caregivers are familiar with the steps needed to plan for lifetime financial assistance for their special needs dependents.
That means about 80% of caregivers have NOT planned sufficiently.

5. Special Needs Planning Check-up
Does your dependent currently have an asset of $2,000 or more in his or her name? (ie: savings bond, UTMA or UGMA account)
Have you, or others, left more than $2,000 to your dependent with special needs in your will or trust?
Have you identified a care provider?
Have you named your dependent with special needs as a beneficiary of your life insurance or retirement plan? Are you sure?
YES NO
Here are a few questions to help you check if you have some immediate planning to do for your dependent.
Check off yes or no in your copy of this presentation while we explore the implications of these questions.

6. One “Yes” Could Be Too Many
Even one “yes” answer could jeopardize the secure future of your dependent with special needs.
If you answered YES to even one of these questions, you may need to do more planning to fully secure the future of your dependent to provide the type of life you want him or her to have.
Now let’s explore the legal and financial issues in the area of estate planning for dependents with special needs.

7. Legal and Financial Issues
Special Needs Planning is distinct and different from general estate Planning.
Estate Planning
FINANCIAL
LEGAL
Special Needs Planning
SPECIAL NEEDS
Special needs planning is in the FAMILY of estate planning, yet different from general estate planning both legally and financially.
Estate planning is important for all families. Whether you are leaving behind $1 or a million dollars, you should decide who gets it, how they get it, and when they get it ... it’s not only an activity for the wealthy.
But, it is absolutely crucial for families with a special needs dependent ... let’s find out why.

8. LEGAL CONSIDERATIONS
Let’s look first at some legal issues to consider ...

9. Special Legal Considerations
Wills
Trusts
Guardianships/ Conservatorships/ Guardian ad Litem (GAL)
LEGAL
Specifically wills, trusts, and guardianships and how they are different for a special needs dependent.

10. FAQs About a Will Do I need one? What if I don’t have one?
Is my Will private until I die?
First, I am not an attorney. This is a presentation of practical information for you to take into consideration as you plan for the future of your special needs dependent.
Please raise your hand if you have a will?
Keep your hand raised if it has been updated in the last 3 years ...
Having a Will is imperative if you want to control what happens after you die, especially if you have a special needs dependent.
A Will provides direction to your survivors, through the court, on how to divide your “stuff” after you die.
Did you know that even if you didn’t raise your hand before — you have a will? If you die without a Will, or “intestate”, the State has a Will written for you. When you die without a Will, a States’ laws govern how your assets are distributed to your spouse and dependents. For instance, in Massachusetts, one half of what you own goes to your spouse and the other half is divided among your surviving children.
In the case of someone with a special needs dependent, this may cause serious issues if assets are given directly to the special needs dependent ... we’ll talk about the $2000 limit a little later.
Also, without a Will, it’s a judge who decides who will take care your special needs dependent after you are gone.
Even if you do have a Will, it is a matter of public record and may be subject to probate, a legal process that takes place after someone dies.
Probate, which can be a lengthy and costly process, includes the process of Will validation, property identification and inventory, property appraisal, debt and tax payment, and remaining property distribution as the Will, (or State, if there is no Will) directs.

11. FAQs About a Living Trust
What are the benefits?
What is the role of the trustee?
How do I select the best person?
Let’s discuss trusts for a moment.
Trusts are not just for the wealthy, but why do the wealthy use them?
To:
Avoid probate
Have assets go directly to the beneficiary by operation of contract
Avoid the Will being a matter of public record.
The appointed trustee is responsible for the assets and the management of the trust.
So who’s the best choice for trustee?
An Aunt, Uncle or Grandma might know your dependent well and seem like the best choice for a Trustee ... but can he or she manage the money?
In many circumstances, it may be a good idea to appoint co-trustees. For example, a Family Member, for decisions of the heart, and a Financial Professional to act as the money manager.

12. Special Needs Planning Check-up
Does your dependent currently have an asset of $2,000 or more in his or her name? (ie: savings bond, UTMA or UGMA account)
Have you, or others, left more than $2,000 to your dependent with special needs in your will or trust?
Have you identified a care provider?
Have you named your dependent with special needs as a beneficiary of your life insurance or retirement plan? Are you sure?
YES NO
So lets go back to the CHECK UP
Does your dependent currently have assets more than $2000 or have you (or others) arranged to leave more than $2,000 to a dependent with special needs?
WHY does it matter if you answered YES?

13. Federal Law says …
If you leave anything over $2,000 to a person with a disability, he/she automatically loses eligibility for most government benefits.
It’s the law.
WILL
LIMIT 2K
If you answered YES, your special needs dependent may lose eligibility for most government benefits.
There are three main types of government benefits for special needs:
Entitlements that are based upon work record and contributions into the Social Security system.
Welfare needs-based benefits, such as Supplemental Security Income, Medicaid, food stamps.
Sliding scale services, such as medical and social service programs, where a person pays for the benefit based upon their ability to pay.
Help your special needs dependent by educating well-meaning relatives and friends, like Great Aunt Tessie. Explain the importance of not putting anything in your dependent’s name, not in their will, not as an insurance policy beneficiary, and no gifts of stocks, bonds, or cash. Anything over $2000 may invalidate any government benefits you have in place now or in the future for your dependent. But, “your relatives want to help your dependent”, you say? ... of course they do! That’s why it’s important for you to investigate setting up a Special Needs Trust ... your relatives and friends can name the Special Needs Trust as the beneficiary of their Will or insurance policy. Let’s explore a Special Needs Trust in more detail ...

14. A Possible Solution The Special Needs Trust
How does it protect my dependent’s government benefit eligibility?
What can it provide?
Are there restrictions?
The Special Needs Trust protects eligibility for federal benefits and enables your dependent to receive assets from your estate while preserving their government benefits.
A Special Needs Trust is designed to protect the quality of life for your dependent. The purpose of the trust is to “Supplement not supplant” state and federal programs.
Make all family members aware of the Special Needs Trust once it is drafted. The Special Needs Trust can provide for special medical equipment, eyeglasses, and even a trip to Disney with a specified caregiver. Assets cannot be given directly to the beneficiary. Assets must be paid to a third party provider for the benefit of the person with special needs.
Make certain that the attorney you use to draft a Special Needs Trust has true expertise in special needs planning. And, be cautious of faulty estate planning techniques such as Disinheritance, for example. Get help from an expert - one that knows the ins and outs of creating a long term special needs plan.
I can give you a simple question to ask an Attorney if they have expertise…..or I can provide you with a list of qualified attorney’s if needed.

15. What Should I Know About Guardianships?
When do I begin the process?
If my dependent is over 18?
Depending upon where my dependent lives …
The next legal consideration is Guardianship
In most states, once a person turns 18, they are considered adults in the eyes of the law and able to make decisions about their daily life. So in the case of a special needs dependent that has reached the age of 18, guardianship becomes a very personal family issue to find a balance between the concerns of the family and the abilities of the special needs 18 year old with the self determination and independence issues of the dependent.
Guardianship needs to be appointed and approved by the probate court, and rules vary state to state. For example, in Massachusetts and 12 other States, guardianship is not an all or nothing situation ... you can have guardianship over property or a specific subject matter, such as health decisions. Other options are available such as Health Care Proxy and Power of Attorney. And, representative payees receive monies on behalf of a special needs person ... establishing the need for unquestionable trust in this type of situation.
Establishing guardianship is a very personal issue and every family needs to make their own decisions based upon their unique situation.

16. Back to the Check-up
Does your dependent currently have an asset of $2,000 or more in his or her name? (ie: savings bond, UTMA or UGMA account)
Have you, or others, left more than $2,000 to your dependent with special needs in your will or trust?
Have you identified a care provider?
Have you named your dependent with special needs as a beneficiary of your life insurance or retirement plan? Are you sure?
YES NO
Have you identified a caregiver for your dependent?

17. Let’s say, YES …
… I have identified a care provider for my dependent with special needs.
Once identified, how do you know that your dependent is getting the type of care you would give them?

18. Let’s say, YES …
… I have identified a care provider for my dependent with special needs. But how do I help personalize the care to be similar to the care I give my dependent?
How can you insure that the care giver you have chosen will nurture for your dependent in the way you intended?

19. The Letter of Intent What is it? Why does my dependent need one?
How do I create one?
One method, is a Letter of Intent
It’s not a legal document (it is not binding) but it does deliver your thoughts, dreams, and desires for the care of your dependent.
I refer to it as “The note to the babysitter … on steroids”
You use the letter to describe a day in the life of your dependent. Their likes, dislikes, routines, favorite foods, thoughts on religion, dating, etc.
It lists the doctors you like and those you would NEVER visit again, it lists medications, therapists, services, etc.
We can help you create one, I’ve seen all types ... some long, some short, most are written, and some are in video format. What’s right for you? That depends on your preference and situation.

20. FINANCIAL CONSIDERATIONS
And now, let’s look at financial considerations ...

21. Let’s Focus on Financial
Many ways to fund your dependent’s special needs trust:
Property
Investments
Retirement funds
Life insurance
FINANCIAL
So, we talked about creating a Special Needs Trust ... you may ask how are you going to fund one?
Well, there are many ways to fund a special needs trust. For example, you could consider funding it with:
Property ... but how liquid is this asset?
Investments ... although they are pretty volatile these days and think back to
Retirement Funds ... the reality of this option is that you are most likely going to need every penny you’ve saved for YOUR retirement
So that leaves ...
Life Insurance ... the majority of special needs trusts are funded with life insurance ... let’s find out why.

22. Why Life Insurance? Maximizes the benefit to the trust taxes
Creates a sum of money even where none exists
Leaves remaining estate for other family members
Can be budgeted to meet income needs
Provides contractual guarantees*
Dials in the right benefit amount to provide lifetime care
It’s generally free of probate and estate taxes.
It helps create an estate where one may not exist.
It leaves the estate intact for other family members.
It can be designed to meet most budgets.
Certain types of policies provide guarantees.
It meets the financial demands for lifetime care and quality of life issues.
*Guarantees are subject to claims paying ability of issuing insurance company.

23. Final Item in the Check-up
Does your dependent currently have an asset of $2,000 or more in his or her name? (ie: savings bond, UTMA or UGMA account)
Have you, or others, left more than $2,000 to your dependent with special needs in your will or trust?
Have you identified a care provider?
Have you named your dependent with special needs as a beneficiary of your life insurance or retirement plan? Are you sure?
YES NO
Now let’s cover the final Check Up item:
You probably have some type of life insurance coverage, either individually or at work. Have you named your special needs dependent as a beneficiary? It’s very easy to select this option in the contingent section: “All children of insured”.
This is a concern we covered earlier, if you leave assets of more than $2,000 to a person with special needs, he or she may lose eligibility for government benefits.
Keep in mind that your retirement and 401K plan has a beneficiary designation as well.
Check all your financial vehicles to make sure your beneficiary selection won’t disqualify your special needs dependent from receiving the government benefits they qualify for. And, it’s a good time to check with family, godparents, friends, and anyone else that may have thought they were doing a good deed.

24. What Type of Life Insurance is Best?
The best solution to fund your dependent's Special Needs Trust depends on:
You
Your dependent with special needs
Your family
What type of life insurance should I use to fund my special needs trust?
That depends; there are many types of life insurance policies available.
Term Insurance
Whole Life Insurance
Universal Life
Survivorship Life or second to die policies.

25. Survivorship Life Insurance
Benefits of Survivor Life Insurance:
Insures two people instead of one.
Pays a death benefit to the Trust, after the death of the second person, when money is needed the most.
Generally costs less than insuring two people individually.
A great option is Survivorship Life Insurance.
It insures two people instead of one, the parents of a special needs child, for example.
The death benefit is paid to a trust only after both insureds have died.
It generally is less expensive than carrying two policies individually.

26. How Do I Decide How Much is Needed?
Do your best to estimate the expenses for a lifetime of care by projecting monthly income needs.
Choose an investment return with which you feel comfortable.
Assure enough to not deplete principal.
Remember, this is to supplement care.
So how do you figure out how much is needed to fund a Special Needs Trust?
First, estimate lifetime care expenses by projecting monthly income needs.
Choose an investment return you’re comfortable with.
Guarantee enough so the principal is not depleted.
And remember, this is to supplement care, not take the place of government benefits.

27. How Do I Start the Planning Process?
With special needs professionals
Legal Estate Planners
Special Needs Planners
So how do you get started?
There are two types of estate planners, legal and financial.
Generally it makes the most sense to begin with the financial professional.
Work to determine what is needed financially before drafting a trust.
And know that most of the facts and figures you collect to work with the financial professional can be used with the attorney, as well.

28. Make Your Dependent’s Future More Secure
Find quality professionals to assist you
Always remember that YOU are the expert about your dependent
Think “lifetime care” and “quality of life”
We can help!
We can connect you with quality professionals to assist you and your family
When it comes to your dependent we understand that YOU are the expert.
It’s important to think about lifetime care but critical to think about QUALITY of LIFE.

29. HOW DID WE DO?
It is always helps me improve to learn about the quality and delivery of presentation information intended to help you. I would appreciate you taking a few moments to tell me how I did today by completing the brief evaluation form I handed out at the beginning of this seminar.
Thank you for joining me today. I am here to help with this very important and special planning.

30. Disclaimers
IRS Circular 230 Notice: The information contained in this workshop is not intended to (and cannot) be used by anyone to avoid IRS penalties. This presentation may support the promotion and marketing of insurance products. Your clients should seek tax advice based on their particular circumstances from their independent tax advisors. Life insurance offered through Allstate Life Ins. Co. & Allstate Assurance Co., 3075 Sanders Rd, Northbrook IL 60062; Lincoln Benefit Life Co., 1221 N St. Ste 200, Lincoln NE 68508; American Heritage Life Ins. Co., 1776 American Heritage Life Dr., Jacksonville FL In New York, life insurance offered through Allstate Life Insurance Company of New York, Hauppauge NY. Securities offered by Personal Financial Representatives through Allstate Financial Services, LLC (LSA Securities in LA and PA). Registered Broker-Dealer. Member FINRA, SIPC. Main Office: 2920 South 84th Street, Lincoln, NE (877) Check the background of this firm on FINRA's BrokerCheck website This presentation is intended for general consumer education purposes and is not intended to provide legal, tax or investment advice. © 2015 Allstate Insurance Company
ALR (5.16)