Financial planning for disabled people a little-tapped field
Growing incidence of Autism, Alzheimer's disease and other disabling conditions are fueling demand for financial planners who can navigate the tricky terrain of making sure families' loved ones are provided for when they can't provide for themselves.
The specialty, which goes beyond traditional retirement and estate planning, is slowly developing within the financial services industry, but experts say many more advisers are needed.
“This is a market that they really need to pay attention to,” said Adam Beck, interim director of the MassMutual Center for Special Needs at The American College, a Bryn Mawr institution that accredits financial planners. “We're not even close to the point yet of getting into the special needs community (and talking about) how important it is to talk to a financial planner.”
So far in the brief history of special needs financial planning, many advisers and clients stumble upon the specialty by chance, experts say. Advisers often get involved because of a personal experience with a disabled or sick family member. And families seeking retirement and investing help discover these professionals who do more than make sure their money grows.
That was the case for Steve and Maxine Shangold. The Pine couple knew their eldest daughter, Alyssa, might require some level of care for the rest of her life, but they said that when they went searching for a financial adviser in 2009 the objective was mainly retirement planning.
Ten years earlier, when Alyssa was 8, she was diagnosed with a rare brain tumor. Surgeons at Children's Hospital of Pittsburgh were able to remove much of the tumor, and a year of radiation and chemotherapy killed off the rest of the cancer.
But the treatment had left Alyssa — now 24 — with loss of some motor skill function, hearing problems and some issues with brain processing, the Shangolds said.
Alyssa has accomplished a lot considering her initial prognosis was a less than 50 percent chance of surviving the cancer, her parents said. She graduated high school on time in 2009. She earned a bachelor's degree in independent studies, with a concentration in psychology and social work, last year from Edinboro University. She has aspirations of living independently and working with children.
“Things are still challenging for her,” said Steve Shangold, a former CEO at Findlay technology staffing firm Mastech. “She'll never be able to drive on her own.”
The Shangolds hired Mike Duckworth, an adviser with Bank of America Merrill Lynch in Pittsburgh, not knowing that he manages a special needs financial planning practice with clients across the country.
“I just knew Mike was a financial planner,” Steve Shangold said. “It was really through our discussions with Mike about our overall family that he started to talk about us planning for Alyssa's needs.”
Duckworth said the work he and his team does includes all the same functions of traditional financial planning, including wealth management, estate planning and tax strategies. But those services are combined with sophisticated trust planning so a family's wealth doesn't disqualify them from government support programs, which often are funded through Social Security and Medicaid and have asset limits.
“People want to set aside money for a disabled family member and not have that count against them,” Duckworth said.
Duckworth helped the Shangolds find programs that support people with disabilities. Alyssa is living in Florida — the Shangolds are splitting time between Pittsburgh and Naples — in an apartment managed by a group that provides housing, transportation, vocational training and other support to disabled people.
He also helped Steve Shangold transition from being a business executive to work about which he has become passionate since Alyssa's illness. Shangold is active in fundraising for cancer treatments, is a board member of the Children's Hospital of Pittsburgh Foundation and is executive director of ONS:Edge, an arm of the Oncology Nursing Society that helps provide better information to cancer nurses.
While government programs shoulder some of the financial burden, the costs of care for a person with disabilities can be tremendously expensive, ranging from $1,000 a month to $10,000 a month, experts said.
Home care aides cost an average of $19 an hour, or nearly $20,000 a year for 20 hours a week. Adult day care can range from $7,750 to $32,500 a year.
The cost of caring for a person with Autism Spectrum Disorder can be $2.3 million over their lifetime, according to Autism Speaks, an advocacy group.
More families will face those costs as diagnoses of the disorder skyrocket. The Centers for Disease Control has reported that 1 in 68 children were diagnosed in 2010, up from 1 in 150 in 2002.
“You have a population, particularly among children, that is seeing higher diagnoses of conditions that will last a lifetime,” Beck said.
The American College last year began certifying advisers with the Chartered Special Needs Consultant designation — the first and only certification in the country for special needs financial planners, lawyers and others, Beck said. So far, the college has awarded 145 designations and has 335 people working toward it.
Other companies have developed practices around special needs financial planning, including insurance companies Northwestern Mutual, MassMutual and MetLife.
Experts stressed that any family, regardless of income, can benefit from special needs financial planning. At the very least, Beck said, a parent's life insurance policy should be tied to a trust for the family member with a disability.
“You need to protect that person from losing what they're getting or could possibly be getting,” said Joanne Gruszkos, director of the special needs program at MassMutual.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or email@example.com.