1. Integrating Special Needs and Financial Planning
Andrew H. Hook, CELA, CFP®
Oast & Hook, PC
Scott MacDonald,
FVP, CSNA
Merrill Lynch
First Vice President - Investments
Portfolio Manager - PIA Program
2011 Special Needs Alliance Boot Camp

2. Case Study - First Party SNT
41 year old quadriplegic with cognitive issues
Rents in rough neighborhood
Sister provides in-home assistance
$224/month SSDI, $450/month SSI
and on Medicare and Medicaid
Expected to receive $3.2-$3.5
million
$210,000 annual expenses

3. Case Study - First Party SNT Challenges
Family has language and cultural barriers
PI Atty and Client’s sister want no risk in investments
Would like to purchase home - $600,000
Difficulty in estimating budgetary expenses
Client needs adaptive van every 5-7 years

4. Case Study - First Party SNT Insights
Assets insufficient to support expenses throughout Client’s life expectancy.
Home purchase reduces available capital and increases fixed costs
How do we preserve capital and assets for his lifetime?
Need to model multiple
non-recurring expenses into
the future.

23. Third Party Special Needs Planning Case Study
Andy (age 62) and Maureen (age 60) are in good health and have two children, Alexis (age 29) and Lauren (age 26). Alexis is single, a graduate of the Darden School at the University of Virginia with a MBA, and heavily indebted (about $110,000) with school debt. Although they had hoped to do so, Andy and Maureen had not been able to assist Alexis with her graduate school tuition while providing for Lauren. Lauren has autism with low intellectual functioning and lives with Andy and Maureen. After graduation with a special education diploma, she began work in supported employment with a job coach. She receives SSI and Medicaid benefits. In addition to Medicaid, Lauren has health insurance through Andy's group health insurance policy.
Andy and Maureen have the following assets:
Andy
Maureen
Joint
Bank Accounts
$40,000
Brokerage Act
$200,000
Home
$350,000 (FMV)
$50,000 (HELOC)
401(k)
$350,000
Total
$540,000
After reading Stocks for the Long Run, Andy used a 70/30 asset allocation; the recent stock
market recession has not been kind. In addition to these assets, Andy owns a whole life policy
with a death benefit of $125,000 and a cash value of $40,000. Andy and Maureen do not own
long term care insurance. Andy’s mother and Maureen’s mother are still alive, with the
potential of a total inheritance of about $250,000.

24. Case Study – Third Party SNT
Andy (62) and Maureen (60) – 2 children
Alexis (29), single, MBA and heavily indebted
Lauren (26), autistic, lives with them and works
Receives SSI and Medicaid
Also has health insurance through Andy’s work

25. Case Study – Third Party SNT Assets
Bank Accounts - $40,000
Brokerage Account - $200,000
Home - $350,000 (FMV) and $50,000 (HELOC)
Andy 401K - $350,000
Andy LI - $125,000 (Death value) and $40,000 (cash value)
No LTCI
Potential Inheritance - $250,000

26. Case Study – Third Party SNT Income
Andy Salary - $150,000
Andy plans to work 4 more years
SSA at 66 is $2,306
SSA at 70 is $3,074
Maureen is retired - $30,000 pension
SSA is $1,556

27. Case Study – Third Party SNT Concerns
Plan for retirement
Estimated annual expenses - $150,000
Lauren’s annual expenses - $40,000
Estate to provide for Lauren and provide inheritance for Alexis

28. Case Study – Third Party SNT Plan
Created 3rd Party SNT for Lauren as part of estate plan
SNT will name bank as trustee, Alexis as trust protector
SNT authorized the trustee to retain and pay for professional case management
Create financial plan

40. APPENDIX,
ASSUMPTIONS
And
METHODOLOGY

41. IT ALL COMES DOWN TO SPECIALIZATION
Evaluating Financial Advisors; Given how important it is to have an accurate budget and secure investments, how do you choose the right financial advisor?
IT ALL COMES DOWN TO SPECIALIZATION
Just as you would not seek a traditional attorney to consult on complicated benefits issues
or draft a complicated SNT, you should be wary of generalist financial professionals for your
cases. Seek a qualified specialist:
Ask them what experience they have with families with disabilities.
Can they show you examples of their planning work?
What references do they have from families with disabilities? Check them!
What Specialized Professionals do they work with? Get references and check them!
Do they have any Special Needs Planning Certifications?
How do they charge, and is there a conflict of interest?
What experience do they have with Court Supervised Accounts and the special laws governing their investments?
How many cases do they currently manage? What value of assets under management?
What articles have they written or been featured in?
Can they show you examples of their educational outreach materials?