‘Unpaid Supports’ Thwart Planning for Special-Needs Families

They often get lost in “day-to-day survival” and need your help, says this financial advisor and special-needs mom.
By Kristin Carleton

As a financial advisor, you work every day translating a client’s hopes and dreams (intangibles) into a plan to reach their goals (tangibles). You set-up objective ways to measure — from Monte Carlo analysis within financial planning software, to measuring investment performance against a benchmark.

When you work with a special-needs family, often their hopes and dreams are lost in day-to-day survival. And the fear of that family is palpable — I know this, as a special-needs mom myself.

The greatest fear of the special-needs family — especially the caregiver(s): What happens to me when I am no longer here?

Most financial advisors with an understanding of the special-needs family know certain components of special-needs planning need to be taken care of. This includes setting up a special needs trust, checking beneficiaries, writing up a care plan, designating guardians, opening an ABLE account and purchasing life insurance. Once those boxes are checked off, the planning is considered complete.

But I invite you to revisit my second paragraph: Why are these families lost in day-to-day survival? What is stopping them from focusing on their hopes and dreams, and building plans for the future?

The answer is the incredible amount of unpaid labor and supports that caregivers in special-needs families are “surviving.”

57 hours per week of unpaid labor

According to ARC, a national advocacy organization, families spend an average 57 hours per week performing unpaid labor to care for and support their family member with a disability. These caregivers are extremely worried because they wonder, “Who else will provide that 57 hours per week of care?”

And because that unpaid labor is largely unaccounted for and unappreciated in terms of economic terms, it is often left out of financial planning. I cannot tell you how many times someone has come to me with a life insurance policy for $1 million dollars. When I ask them how they arrived at that amount, the response is often, “It seemed like a good number and plenty to take care of them.”

As financial advisors, we are numbers people. Imagine the relief you can provide families if you can help them identify all of the unpaid supports they are providing to their family member(s) with disability(ies), and quantify how much they cost. Think of the restful nights you can provide by taking that quantified number, and building it into their financial planning.

You can help your clients show that all of the work they do — that most of society does not appreciate, that they’re not paid for and that slips through most diagnostic cracks — will continue after they are no longer around to do it themselves.

My own math

Recently, I went through the exercise of looking at all the unpaid supports that I provide to my children.  I came up with 60 hours a week of unpaid labor — on top of my day job as a financial planner. I also calculated that to replace the labor that I provide to my children in unpaid supports would cost about $125,000 annually.

This would include finding a caregiver who could drive to and from therapy appointments, attend these appointments and then implement the therapies in everyday life. This caregiver would have to ensure that the supports my children need are implemented across every aspect of their lives (during school, afterschool care and nighttime routines). They’d also have to research and purchase therapeutic and medical supplies, and find specialists that are familiar with their disabilities and medical needs, etc. I went as granular as possible.

I then went into the very granular areas of our budget.

Clothing budgets are different for children with sensory differences (although that is getting better as brands such as Target and Old Navy begin to embrace the disability market!). My children also have very specific food preferences Often special-needs families have very specific nutrition or food needs that are expensive and rarely covered by medical insurance). We are working to obtain several Medicaid waivers, but do not have them now and at the moment I have to assume we will never receive them.

Then we look at housing. My children’s guardians would be required to purchase a new home to make room for my kids. They’d also have to factor in the cost of home upgrades and find someone to manage the project. Vehicles and car seats don’t last forever, so they would also have to shop for new ones that could accommodate my children.

Underinsured by $850,000

After I had an annual estimate of the total expenses my children would need covered if I was not here, I was able to do more traditional financial-planning work. I did a net present value calculation of the number that would be required to currently support them, and then I subtracted the assets that I have already saved. This gave me the number that I needed for life insurance.  And guess what: While I had been told by others that I was crazy for having so much life insurance, I was underinsured by $850,000.

And life insurance to cover my kids if I pass away is the tip of the iceberg, right?  As I look at retirement planning for my family, I build in a separate plan for my children that includes how much income they will need on an annual basis to support themselves. I am really building two parallel plans – a retirement plan for me and my husband that covers 30 years of retirement, and then additional plans for each of my children that allow for income over their full lifespans.

A triple purpose

You might be wondering if doing this amount of work is worthwhile. Why would it be worth your time to go this granular into both paid and unpaid expenses and supports provided to special-needs family members?

The answer is threefold: 1) To provide peace of mind to your clients; 2) To help them increase their savings, their life insurance, and their investment outlook (which also, incidentally, should increase your revenues); and 3) To truly provide intergenerational wealth planning to special-needs families.

Kristin Carleton, CEO of Special Abilities Network, provides special needs planning by addressing the funding supports, legal strategies and clinical supports necessary for every member of the family. Her son Eli was born with a congenital brain disorder, which ignited her passion for planning for her son and daughter. Her life’s purpose is to pave the way for other families to be the heroes of their own stories. Kristin is honored to see families living their best lives and to be a part of those supports. She can be reached at 919-433-7713 or kristin@specialabilitiesnetwork.com