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Money Management: Financial Planning for Your Child’s Future

Target Audience: Parents of children/young adults with special needs Audience Profile
To understand how to assist parents with a special needs child, it may be helpful to consider the challenges these parents face. For most families, financial planning involves ensuring that they have enough money to pay the bills while at the same time saving for their children’s college education and their own retirement. But for families with special needs children, financial planning takes on a whole new, and often heart wrenching, dimension. The US Census Bureau estimates that more than one in ten Americans between the ages of 16 and 64 suffers from some form of physical, mental or emotional impairment. Special needs can range from disabilities that are obvious to those that are less evident. For example, special needs can include medical conditions such as cerebral palsy. It can mean physical conditions, such as blindness or the loss of a limb. And it can mean neurological conditions, such as learning disabilities, mental retardation, or autism. A 2005 study conducted by MetLife discovered that, “sixty percent of parents do not expect their special needs children to ever be financially independent. Yet despite recognizing that they are likely to die before their children, two-thirds (68%) of parents have not written a will, and nearly one-third (29%) have done nothing at all to plan for their children’s financial future.” Additional information provided by the MetLife study indicates that the level of concern cited by parents of children expected to remain dependent is out of sync with the actual number who have done something meaningful in the way of securing their children’s financial future. The MetLife study suggests that while parents do want to do right by their children, they simply do not have access to financial planning information that focuses on planning a secure future for special needs children. Where do parents turn for financial advice? Often times, they turn to sources that have been helpful with medical issues—the medial profession and the Internet. Very few seek advice from professionals such as attorneys, financial planners, investment advisors, or insurance agents.

Program Overview
Parents of children with special needs children face day-to-day issues that are sometimes overwhelming. Just getting through each day can be exhausting. There never seem to be enough hours in the day to breathe, let alone plan for the future. The key to this short program is to encourage participants to take steps now to secure their children’s future by engaging in financial planning. This 60-minute program is designed to provide participants with a few tools to make a plan for the future, write a Letter of Intent, prepare a budget for future needs, and select a professional financial planner.

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Facilitator’s Preparation:
   Review this guide and complete your own set of the accompanying worksheets. Review the suggested length for each topic noted as (10) or (15) and so on. This session is designed to be 60 minutes (1 hour) from Welcome to Wrap. Consider your own situation. Do you have a person in your life with special needs? Do you know anyone who has a child with special needs? How would you cope with all of the issues regarding caring for a child with special needs? Would you be worried about the future? Think about your own money management behavior. Are you prepared for your financial future? If you have dependents, have you planned for their future when you’re not around? Are there some money management lessons learned from your own experiences that may be helpful to share? Consider that when it comes to talking about money, sharing your own successes and challenges may be more engaging and effective than appearing to be lecturing.

Materials Needed:
       Flip chart and easel or marker board; markers Pencils for participants Copies of Planning for the Future worksheet Copies of Letter of Intent Outline worksheet Copies of My Child’s Future Spending Plan worksheet Copies of Questions to Ask… information sheet Copies of My Action Plan worksheet

How to Facilitate this Session Welcome
(8)  Introduce yourself and express your pleasure in sharing money management tools that can be used for financial planning. Have each participant introduce him/herself and share one current financial worry about his/her child’s future. List the worries on the flip chart or marker board. Share the program objectives and tie them back to the list of worries. • Plan for the future • Write a Letter of Intent • Create a budget for future needs • Select a professional financial planner • Commit to an action plan Explain to participants that just as their children are not exactly the same, their financial situations are unique. However, each of them shares the same desire to protect their child’s inheritance and ensure that he or she is taken care of after they die.

Planning for the future…

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?Ask participants how many of them feel a bit overwhelmed by the prospect of planning for their child’s future, while they are managing their day-to-day lives.  Explain that the first step to balancing the present and the future is to answer a series of questions that will help them focus on what needs to be done. In some cases, they may be able to answer the question in the affirmative, in other cases, they may not have even thought about the question. The important thing is to begin planning for the future! Distribute Planning for the Future worksheets. Direct participants to take the next 7-9 minutes to complete the worksheet. When time is up, divide the group into small groups of 3-5. Encourage participants to share their responses in their small groups. Allow for 1015 minutes for participants to share. Suggest that these are tough questions and require critical choices and decisions. ?Ask participants to indicate by a show of hands how many of them have written a Letter of Intent.

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Letter of Intent
 Explain that Letter of Intent is a document written by the parents or guardians of a child with special needs that describes the child's medical history, the child's current situation, and what they hope for the child's future. This letter should be started as soon as possible and updated as their child grows. The Letter is then ready at any moment should they become ill, disabled, or they pass away.  Suggest that preparing the Letter is often a very emotional experience for parents. The process is not an easy one and it may take several months to complete. Once the Letter is completed, they should have it witnessed and notarized. In addition, it should be formally updated about every six months. Distribute Letter of Intent Outline worksheet. Review each area and answer any questions. (Encourage participants who may have written a Letter of Intent to share their experiences and advice.) Explain that the Letter may be written in any format. Stress that the Letter is one thing they should not procrastinate about. Sometimes people feel that the odds of something happening to them are slim. But take a moment and think—if they are the primary caretakers of their child with special needs, would their spouse really know how to do everything? If something were to happen to both parents, who would know what kind of care their child needs and deserves? ?Ask participants how many of them use a spending plan to track their income and expenses on a monthly basis.
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Budgeting for the Future
(8) Explain that while it’s important to create a monthly spending plan to manage today’s expenses, it’s even more important to create a future spending plan for their child.    Explain that before participants engage in financial planning for their child, they need to identify their child’s sources of income and expenses. Distribute My Child’s Future Spending Plan worksheets. Review each section and answer any questions. Explain that once participants have identified the total expenses and income, they’ll be able to determine if presently they have enough money to set aside so that if anything were to happen, their child or other dependent with special needs could continue to lead the quality of life they have planned for him or her. Stress that like most financial plans, however, things can always change and all plans should be re-considered, and if necessary updated on an annual basis. ?Ask participants if they are currently working with a professional investment adviser.

Selecting an Investment Professional
(5) Suggest that as participants begin to plan for their child’s financial future, they may want to seek the help of an investment professional.   Stress that before participants meet with an investment professional, they should draw up a list of questions. They should always meet face-to-face! Distribute Questions to Ask… information sheet. Review the four areas of concern and the suggested questions. Answer any questions.

Wrap (5)

Review the list of worries and note which ones were addressed and which ones will need to be addressed at a later time. Review the topics covered in the session:  Planning for your child’s future  Writing a Letter of Intent  Creating a future spending plan for your child  Identifying the need for supplemental income  Selecting an investment professional Remind participants to review the questions posed on the Planning for the Future worksheet.

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Encourage participants to sit down in the next week and start to write their Letter of Intent. Encourage participants to complete their My Child’s Future Spending Plan worksheets. Distribute My Action Plan worksheets. Encourage participants to take a few minutes to complete their worksheets to ensure that they get started planning for their children’s financial future immediately Thank participants for their attendance and let them know how much you enjoyed spending an hour with them. Provide them with any additional information as agreed upon with your agency contact.

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1. Do you or your spouse have a vision of how your child will live if both of you are not around?

2. Have you identified a guardian, conservator, or trustee for your child?

3. Do you have a complete understanding of Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) government benefits?

4. Have you begun setting aside money for your child with special needs?

5. Do you have a written Letter of Intent?

6. Have any of your children, with or without special needs, been excluded in your will?

7. Do you have a special needs or supplementary trust set up to preserve government benefits?

8. Have you made provisions to fund these trusts with assets or insurance?

9. Have you coordinated your special needs planning with other relatives?

10. Have you done everything possible to protect your child's financial future?

11. Have you planned where your special needs child will live if you are not around?

12. Will your child be able to earn enough to care for him or herself?

13. Will your child have adequate health insurance? Project Independence – Disabilities Money Management 6

Letter of Intent Outline
The letter can be addressed to anyone you wish. For example, “To Whom it May Concern,” “To My Guardian(s), Trustee(s), and Executor.” The letter should address everything that is important in your child’s life: residential, social, community, integration, religion, employment, likes and dislikes, food preferences, medical, behavior management, names of guardians/advocates, trustees who will manage your child’s estate—even such things as information on preferred sleeping positions or favorite music.  Family History Where and when you and your spouse were born, raised, married, something special about grandparents, siblings, and other relatives, special friends, description of your child’s birth, when, where, your feelings, etc. General Overview A brief overview of your child’s life to date and your general feelings about the future. Education Summary of past educational experiences and desires for future education; regular classes, special classes, special schools, mainstreaming, extra curricular activities; educational emphasis—academic, career and technical; names of specific programs, schools, teachers, related service providers. Employment Types of work your child might enjoy; sheltered workshop, open employment with supervision, activity center; companies that you are aware of that may be of interest to your child and provide employment in your community. Future Residence Specify if your child is to live with relatives or friends and provide names and addresses; if not these people or these people die, your other options such as group home or institution in same community—describe the best living arrangement. Social List types of social activities your child enjoys; indicate whether he or she should have spending money and how he or she should spend it; list favorite foods and eating habits; explain if your child takes and enjoys vacations. Religious/Spiritual Life Specify religion; local place of worship your family attends; local clergy that may be familiar with your family; any religious education that should be provided. Medical Care List diagnoses, immunizations, surgeries, illnesses, seizures, levels of functioning, vision, hearing, speech, mobility, blood type, insurance, allergies, birth control; current medications, how administered, for what purpose; describe medications that have not worked in the past; list current doctors, therapists, clinics, hospitals, etc., and how often your child attends and for what purpose. Behavior Management Describe current behavior management program that is being used; outline behavior management programs that have not worked. Financial Information List assets, income, services and benefits, expenses and changes that will occur upon the death of both parents. Final Arrangements List any prearrangements you have made and/or desires for your child’s funeral arrangements; choice of funeral home, cremation or burial, cemetery, monument, religious service and clergy. Additional Information Include any other information you feel will ensure your child’s best possible care. Once you write the letter, both parents should sign and date it. Each year, take it out and add to it or revise it and sign and date the changes. Remember, this is not a binding, legal document. However, it provides guidance and it speaks for both the family and the child. Money Management 7

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 Note:

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My Child’s Future Spending Plan
The goal of completing this worksheet is to raise your awareness of the amount of money your child with special needs might need if both parents are deceased. It is designed to help you plan for lifetime care AND quality of life so that you can determine how to fund a special needs trust, and provide you with some idea of how much you will need. Housing/Living Rent/Mortgage Utilities Other Total Housing/Living Expenses Care Assistance Respite Care Custodial Care Nursing Care Other Total Care Assistance Expenses Personal Needs Personal Grooming Other (Clothes, shoes, etc.) Total Personal Needs Expenses Education and Employment Transportation Uniform/Dry Cleaning Tutoring/Job Assistance Meals Other Tuition/Fees (annual) Books/Supplies (annual) Other annual expenses Total Education and Employment Expenses Special Equipment Wheelchair/Assistive Technology Specialized Computer Equipment Durable Medical Equipment Books in Alternative Format Service Animals Technical Instruction Other Total Special Equipment Expenses Medical/Dental/Vision Care Doctor Visits Prescription Drugs Therapy (Speech, Occupational, Physical, other) Over the counter medications Transportation Insurance premiums Other Total Medical/Dental/Vision Care Expenses Monthly Expenses $ $ $ $ $ $ $ Monthly Expenses $ $ $ Annual Expenses $ $ $ $ Annual Expenses $ $ $ $ $ Annual Expenses $ $ $ Annual Expenses $ $ $ $ $ $ $ $ $ Annual Expenses

Monthly Expenses $ $ $ $

Monthly Expenses $ $

Monthly Expenses $ $ $ $ $

$ Annual Expenses $ $ $ $ $ $ $ $

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Social/Recreational Internet/Cable TV DVDs, Movies, etc. Vacations Camp Costs Sporting Events Total Social/Recreational Expenses Miscellaneous Total Miscellaneous Expenses Income for Child with Special Needs Monthly Government Benefits (SSI, SSDI) $ Wages $ Other $ Total Income Income Received at Death of One Parent or Caregiver Lump Sum Amount* Investments Life Insurance Proceeds Other Assets Total Income $ $ $ Annual $ $ $ $ Annual Income from Assets $ $ $ $ Monthly Expenses $ $ $ $ $ Annual Expenses $ $ $ $ $ $ Annual Expenses $

*Please remember to keep in mind any other children or beneficiaries, and do not include the portion of your estate that will be left to them. Only include the amount you know will be available for this individual in this calculation.

Income Received at Death of Both Parents (do not double count assets listed at death of one parent) Lump Sum Amount* Annual Income from Assets Investments $ $ Life Insurance Proceeds $ $ Other Assets $ $ Total Income $
*Please remember to keep in mind any other children or beneficiaries, and do not include the portion of your estate that will be left to them. Only include the amount you know will be available for this individual in this calculation

Total Annual Expenses Total Annual Income Supplementary Needs Annual Supplementary Needs

$ $


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Questions to Ask…
There should be a good fit between you and the investment professional you choose to handle your financial affairs. Interview at least three or four individuals. Before you meet with an investment professional, you will want to draw up a number of questions to help you make the right selection. Here are four areas to consider along with a few questions— feel free to add more questions! Education and Training A college degree is not required of an investment professional, although many have advanced degrees. Some professionals are required to be licensed, certified, or complete extensive training. Know what credentials your investment professional must have before you invest. Visit FINRA’s professional designation database. Find out the education and experience various investment professionals must have, the examinations they must pass, and if they are in good standing.
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What type of education and training do you have? What examinations did you take? Did you pass them? What licenses or certifications do you have? May I see them? Are you registered with the SEC, a state, or FINRA?

Experience Ideally, you’ll find an investment professional who has experience working with parents with a special needs child. A professional who understands your situation and the various regulatory and legal issues associated with caring for a special needs child will serve you well. Most importantly, you want to be sure, without a shadow of a doubt, that you end up working with a legitimate upstanding professional.
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Have you ever worked with a client who has a special needs child? Are you familiar with medical plans, government and private disability benefits, and life insurance? Are you familiar with the legal rights of people with disabilities? Have you ever heard of a Special Needs Trust? How long have you been in the investment business? Where did you work prior to this position? What is the status of those firms today? Have you ever been charged with any wrongdoing or disciplined by a regulator?

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Approach to Investing Determine whether an investment professional will act in your best financial interest. That means respecting your financial goals, tolerance for risk, and need to access your money if necessary.
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What is your investment philosophy? Can you give me the contact information of long-term clients? How often will you review my finances? Do you recommend certain products? What are all the products and services you offer? Knowing my financial goals, how would you approach helping me meet them? How do you decide how my money should be allocated?

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Fees and Commissions

How do you get paid (fee, commission from sale of financial products, fee plus commission)? On the investment products you sell, what is the rate of commission you get paid? Would I pay commission when I buy an investment or when I sell it? Does anybody else get paid when I purchase an investment or are you rewarded with a prize for selling an investment?

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For any investment professional you are interested in working with, do a background check before your first transaction. Look for proper registration, licensing, or certification, as well as disciplinary history. Do not simply rely on family and friends for a recommendation! Remember, your goal is to identify an investment professional you trust—who has the right skills to help you meet your financial goals, make sound decisions, and monitor your investments. If you have a concern or your gut suggests that this person is not for you—walk away.

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My Action Plan
Main message for me from this session:

My personal commitment to action:

Obstacles that may get in my way:

What I need to do to succeed:

Use Limitations. These materials are intended for non-commercial educational and instructional use only. These materials may not be used in connection with any sale, advertisement, endorsement or promotion of any service, product, person or business and may not be commercially published, sold or offered for sale.

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Money Management