Spe­cial Needs? Seek Out An Ad­vi­sor Who Gets It


When her autis­tic son, Gre­gory, was near­ing 18, Kathy He­bert made a call to her long­time brokerage firm for fi­nan­cial ad­vice re­lated to his spe­cial needs and hung up in tears. They just didn’t get it. Then, she made a cold call to Bank of Amer­ica Mer­rill Lynch fi­nan­cial ad­vi­sor Daniel Cut­ter who helped He­bert and her hus­band fig­ure out the spe­cial needs puz­zle, with the hand­hold­ing re­quired. “These are re­ally adult de­ci­sions, and Dan was aware to the sen­si­tiv­ity that we’re go­ing through, hav­ing a plan for Gre­gory’s life af­ter we’ll be gone,” says the 50-some­thing Fre­mont-Calif. mom, adding, “It’s so over­whelm­ing.”

Cut­ter, in San Fran­cisco, and Scott Mac­Don­ald, in Modesto, Calif., have built a whole prac­tice—a team of seven FAs and five staffers—around help­ing fam­i­lies with mem­bers with spe­cial needs. “It’s re­ally hard for the par­ents, and there can be dif­fi­cult fam­ily con­flicts among the kids be­cause the spe­cial needs child gets a lot of at­ten­tion,” Cut­ter says. In some cases, par­ents will give 100% to the child with dis­abil­ity. In those cases, Cut­ter says he’s had con­ver­sa­tions with the other kids “so we can be the bad guys and the par­ents don’t have to be.”

Cut­ter walked the He­berts through how they could pro­vide for Gre­gory as well as his twin sib­lings—a boy and a girl. They got 529 col­lege sav­ings plans, and are ben­e­fi­cia­ries in their par­ents’ will.

For Gre­gory, things were a lot more com­pli­cated. Cut­ter cre­ated a con­ser­va­tor­ship to make sure the He­berts could con­tinue mak­ing de­ci­sions for Gre­gory when he turned 18. He had them set up a check­ing ac­count in Gre­gory’s name where his SSI ben­e­fits come in. His mom was named the rep­re­sen­ta­tive payee. The next step was set­ting up a spe­cial needs trust and get­ting a sur­vivor­ship life in­sur­ance pol­icy that will pour into the trust when the sec­ond par­ent dies (this matches the need as the great­est ex­pense and de­pen­dence oc­curs af­ter the par­ents are gone,

Mac­Don­ald notes). For now, the trust is small, and used to sup­ple­ment Gre­gory’s life­style. He lives at home, at­tends a day pro­gram, and is in a band, the Dream Achiev­ers. His mom, works part-time in the spe­cial needs depart­ment at a ju­nior high school, sings in a Sweet Ade­lines In­ter­na­tional bar­ber­shop group, and is a “proud roadie” for her son’s band.

While trusts are the pri­mary plan­ning tool for spe­cial needs in­di­vid­u­als, new state-spon­sored ac­counts called ABLEs—tax-free sav­ings ac­counts for peo­ple with dis­abil­i­ties—are rolling out, and Cut­ter and Mac­Don­ald say they con­sis­tently rec­om­mend them. Cal­i­for­nia ex­pects to have its ABLE pro­gram up and run­ning by year-end. (ABLEs weren’t avail­able when the He­berts did their ini­tial plan­ning, but they might con­sider one in the fu­ture.) See Fidelity

Launches 529 ABLE Ac­counts for tips on how to com­pare state plans.

The plan for Gre­gory was part of a full fi­nan­cial plan for the fam­ily, in­clud­ing re­tire­ment plan­ning for the He­berts—dad Christo­pher is an IT man­ager at Kaiser Per­ma­nente. Af­ter see­ing all the Mer­rill team did for Gre­gory, the He­berts moved their re­tire­ment ac­counts and their re­vo­ca­ble liv­ing trusts there too. “It’s like your one-stop shop in many ways,” He­bert says.

Her ad­vice for other par­ents is to look for ad­vi­sors who have a con­nec­tion to the spe­cial needs world. “It’s the pas­sion that drives them,” she says. In their case that in­cludes a lawyer who helped with Gre­gory’s ap­pli­ca­tion for SSI (he got it on the first try). The next daunt­ing step is re­search­ing sup­port­ive hous­ing op­tions. Cut­ter has al­ready given her some leads.

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