Financial Opportunities Uncovered: A Keeler & Nadler Family Wealth Podcast
Come take a journey with us as we explore topics and concepts from the obscure to those hiding in plain sight, so obvious that you wonder how you missed the low lying fruit. Financial planner and host Andy Keeler and his team, thought leaders, and guests discuss everything from maximizing your money and lowering taxes to how to gain the upper hand in an auction and the math behind online gambling. We discuss wealth building strategies and wander into deeper aspects of the human mind that can improve or inhibit our ability to build wealth with confidence.
Financial Opportunities Uncovered: A Keeler & Nadler Family Wealth Podcast
Special Needs Planning Made Clear - Legally and Financially
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One unexpected inheritance can knock a loved one off critical benefits, and most families don't find out until it is too late. Keeler and Nadler's Mark Beaver sits in the host chair for this episode and welcomes special needs planning attorneys Logan Phillips and Derek Graham of Phillips and Graham. Together, this vital conversation lays out a clear, practical approach to special needs estate planning and special needs financial planning, built for real life instead of legal theory.
We talk through what “special needs planning” actually means: not just drafting a trust, but creating clarity around Medicaid, SSI, county board services, and the long timeline families are really navigating. Logan and Derek explain when families typically start planning, why connecting with the County Board of Developmental Disabilities matters, and how Medicaid waivers can fund life-changing supports.
Then, Mark, Logan and Derek get specific about the money rules that create the biggest pitfalls: the $2,000 asset limit, how a typical estate plan can accidentally disqualify a person with a disability, and how a third-party discretionary trust often protects benefits. Listen to the very end too as our guests share a key planning lever many financial advisors miss: Disabled Adult Child Benefits and how a parent’s Social Security retirement timing can change outcomes.
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Overwhelmed Families And Introductions
SPEAKER_00It's easy to see how families can become overwhelmed when faced with so many decisions, when all they're trying to do is make sure their family is taken care of. Luckily, today, I'm joined with two perfect guests to help us navigate these complicated situations. Logan Phillips and Derek Graham are the authorities on this topic. They are partners and attorneys at their firm, Phillips and Graham, which focuses on special needs planning. Their expertise is highly sought after around the state and around the country, educating families, advisors, and even their fellow lawyers. Logan and Derek, thank you for joining me today.
How Logan And Derek Got Here
SPEAKER_01Thank you, Mark. Yeah, thanks for having us.
SPEAKER_00Just to start off, uh, I'm curious how you two ended up running a law firm that has a focus in special needs planning to begin with.
SPEAKER_02Derek, you want to cover how we first met?
SPEAKER_01Yeah. So we actually first met back when I had just become an attorney or was in law school. One of the actually I was still in law school.
SPEAKER_02No, you were an attorney. I was an attorney. Okay. I was in law school.
SPEAKER_00And this was 2015, 16.
SPEAKER_012005. Yeah. Okay.
SPEAKER_00Yeah.
SPEAKER_01A little bit. Yeah. Yeah.
SPEAKER_02So we're quite a bit older than you, but uh, thank you for remembering.
SPEAKER_01I went to law school thinking I was going to be a business attorney that did litigation and business work. And then uh the job I got that appealed to me the most after my first year of law school was with a criminal defense attorney, believe it or not. And he's a guy that's been a great mentor and friend to me ever since. But um he's got a lot of good folks that have worked for him through the years. And one of them right after I finished working for him was Logan. And so when I finished working with him, I moved to a business firm that was in the same building. And then Logan and I worked in the same building for several years.
SPEAKER_00Okay. I'm I'm curious, is that common when you come through law school? Do a lot of people know what area they want to practice in, or there's so many different areas of law.
SPEAKER_02I think that most times people go to law school thinking that they what they want to do, and then that often changes. What you'll find too is many people right out of law school go into criminal defense work or prosecutor work. So they either work for a county prosecutor, they work for a criminal defense lawyer, or they go work for the attorney general. Only because that's they're always hiring. Um and so it it's there's always work too. Uh there's always people getting in trouble. So there's always peop a need for people to prosecute them and then also to defend them. So that's where I started, you know. So I was a criminal defense lawyer. I thought it was gonna be exciting and fun, and and it was um up until you know, you go to the jail on Saturday mornings to see your clients, and that's exciting for the first two times, and then you realize that if you're gonna do criminal defense work, you have to be available all the time, and especially when people are making calls and they need to see you, which is Saturday mornings and Sunday mornings because people get in trouble on Friday nights and Saturday nights.
SPEAKER_00So, how did you get from that to doing what you're doing now?
SPEAKER_02So I after working for Joe Scott for a number of years, I uh went and did all kinds of uh law. So I went to work with my father-in-law and my brother-in-law in Delaware, and they did all kinds of different kinds of law, and I did the same. So I did divorce, I did some civil litigation, I did some landlord tenant. Um back then, Delaware was a little bit smaller, so you had to do everything, and somebody would come in the door. Oh, yeah, I can do that. And I really enjoyed working and doing the estate planning work. Um by that time, Derek was working for a firm downtown doing estate planning work along with business.
SPEAKER_01A lot of business, a little bit of litigation, same thing. It was kind of a general practice firm. So I got experience in a lot of different areas of law, which which I really appreciated and enjoyed.
SPEAKER_02And so then I decided that I wanted to focus on estate planning. And back then the firm was called uh Russian Root, and so I went to work there. Um and they had a special needs uh I I guess it's not a department, a special needs area um where Bill Root had practiced some special needs planning, and I really liked it. I have a connection to the community. I am a um I have a stepbrother who has special needs, so that felt like a natural fit. And then as as soon as I started doing that work, I really feel like it was almost a calling. I could see that I could have an immediate impact on people.
SPEAKER_01So for me, I was happily doing litigation and business work and kind of a general practice in the law for the first five years. I was practicing law, which has been great for me in the long term because it gave me exposure to a lot of different areas. Uh, then five years in, my wife and I had our first daughter. We have three daughters, but my oldest daughter was born with Down syndrome. And so that threw me into the world of being the parent of someone with a developmental disability. And um, I never saw it coming. When my daughter was born, I could not have told you the difference between Medicaid and Medicare. I didn't know what a waiver was, I didn't know what SSI stood for, and really didn't have that much of a reason to learn that stuff. And then um, you know, I got thrown into that world of being the parent of someone with a developmental disability, and I quickly fell in love with that world and wouldn't change it for anything now, and it's certainly impacted my career. So people would come to me as an attorney and start asking me questions, and I had no idea what the answers were. And then I eventually connected with an attorney named David Zwire, who became a really good friend and close mentor of mine. Uh, and we ended up meeting for lunch every single Monday. Uh, he was an attorney with the Department of Developmental Disabilities at the time. And so we would meet for lunch every Monday, and then he started letting me tag along the presentations he would do. And then he left the Department of Developmental Disabilities and went to community fund uh pulled trust up in the Cleveland area, and he would still let me tag along the presentations he would do. And then I just started taking on clients and um just absolutely fell in love with that area of law.
SPEAKER_02That's the official version. So Derek and I are both very frugal. Um, some people might use a different word. Uh and his his wife said, Hey, we need to do some special needs planning. And she said, I'm gonna go out and hire another lawyer unless you learn this.
Special Needs Planning Means Clarity
SPEAKER_01That's true. And I was worried that she realized how easy I was to replace in that regard. You know, if I can't even be at her attorney, then what can I do? So um it was in the best interest of myself and and my favorite client being my wife to figure this stuff out. Aaron Powell Good.
SPEAKER_00Well, some folks listening might not have any clue what any of this actually means. They they hear special needs planning, they might have a sense for it, but what does that actually mean? What is special needs planning?
SPEAKER_01Aaron Powell So when you have a child with a developmental disability, you get inundated with information and ver very, very little clarity. Um I mean, even when you have a child with a developmental disability, before you ever leave the hospital, if it's a if it's a diagnosis at birth, you have social workers that come in and they bring you packets and folders and even binders of information and you don't know what any of it is. If you're if you're like me, you're you're trying to figure out how to keep your baby alive while you give them a bath, let alone understand why they would need to care about Medicaid or benefits or things like that. And so you get inundated with information. And so I always tell people my my favorite part of my job is the initial meeting where I can just provide some clarity. Uh, they hear these concepts and they will continually be introduced to concepts. They'll go to new parent group meetings with whatever developmental disability special interest groups they're a part of. They will uh get information from the school, uh, but it's really hard to tie it all together. And so you have this ever-present, nagging feeling that you need all these things to be tied together and wrapped up with a bow, but you don't know where to get that clarity. And that that's the favorite part of my job, is is just providing that clarity. And so that that's what I think of. It's kind of odd because people think of special needs planning that we're there to write trust and that kind of stuff. And we do. That's that's critically important. But it's that initial clarity that I think is the most valuable part of the planning process.
SPEAKER_02I I think that when people hear special needs planning or they have a child with uh developmental disability, they know that that child can't inherit in the way that a typical child might. And so that's what I think people think of when they think of special needs planning is I need to do something different when I die to plan for my child with a developmental disability.
SPEAKER_00Yeah.
SPEAKER_02That's what I think most people think of it as. But as Derek indicated, it's a lifelong plan. It's not just after someone passes away. Uh, it's a lifelong process and series of things to do to make your life easier and to make sure that your child lives the best life they can.
SPEAKER_00So you mentioned some of these things being diagnosed immediately at birth in some cases, is what do you see typically families entering into this process? Is it fairly early on? Are there different stages or or different ways that they get involved with this?
SPEAKER_02I think sometimes it's what I like to think say is that we have we get people at all different times of the highway. Uh so some people have a child that's born with a developmental disability and and they know right away. I get a lot of calls from grandparents when a child is born with special needs. The grandparents say, Hey, I know we need to do something. Um, what should we do? Um and my first my first the first thing I say is tell your tell your child to enjoy that baby, right? That's the most important thing because there really isn't a whole lot with planning that needs to happen that's not already being taken care of by the social workers at the hospital. Um then we see people who come in at the age of 18. Um, they're they they know that they need to do something different at the age of 18, so they come in to see us. And then we have families that come in and mom and dad have been uh had had a had a roommate, their adult child with a disability, their entire lives. Mom passes away. Now the family, dad comes in with brothers and sisters and we do planning. We would we would like for people to come in and and see us and start that planning as early as possible, but I don't think there's any reason to do something, you know, at birth. I think that that's one of the wonderful things that Derek can do with clarity is just he he tells the people, just enjoy that baby.
SPEAKER_01When you have a child that has a developmental disability and you get that initial diagnosis, uh the most important thing for any parent to hear is congratulations, you have a baby. You know, go enjoy having the baby. Uh our medical community, and we've got a lot of great doctors, especially here in the central Ohio area, but our our medical community does a bad job of explaining developmental disabilities by describing how that disability will limit what they can do, and not a good job of promoting how positively it can impact a family to have a person with a developmental disability inside the family. So I agree with Logan. The initial thing is just enjoy having a baby. Um, there's nothing you have to rush out and do from a legal standpoint because you have a child with a developmental disability. Now, having said that, I've never had a client come in and sit down with us, and I know Logan is the same way, and then stand up at the end of that initial meeting and think, yeah, I came too soon. I'll come back in about 10 years. Uh they they're always expressing relief because it's something they have to have, it's something they have to do. And it it comes with everything that you need that's going to occur at your death. But like Logan said, it's also a lifelong plan. So it comes with a lot of clarity and advantages that will benefit you throughout your lifespan and the lifespan of your loved one with a developmental disability. So the earlier you bring those advantages into your planning, the better off it will be. You know, having that clarity, uh, I wish I had known. I wish I had sat down with somebody when my child was younger and they could have told me why I was getting certain information and how it all tied together. So I joke with clients sometimes, they'll say, What's the latest I can wait to do a trust? And I always tell them just make sure you do it before you die. Uh and I say that jokingly, but I I do also mean that, you know, in our firm, it's it's focuses far more on life than than what happens after death. So come in and let us provide some of that clarity.
County Boards, Waivers, And Eligibility
SPEAKER_00And that's such a good point, the perspective that you can have early on, uh, or any parent really in any situation. We spent 10 days in a burn unit with our youngest son, and there were two different doctors that would switch back and forth, and one of them had uh, I would say a slightly more pessimistic viewpoint of how things would go going forward. Uh, and and the other had a much more optimistic, and they were saying the same thing, just saying it differently. And so, like one day we would feel really great, and the next day we would feel like garbage, uh, and and even though we were getting basically the same feedback. Um, so I imagine even more when it's obviously, you know, more of a lifelong uh ramifications of things for these families. The planning for life now versus, you know, the more of a state planning side of special needs, uh, I'd like to dive into that because I I think people do think of that initially of estate planning trusts. These are all things that happen after we're gone. And that is good things to plan for. I I described it early in this podcast of not only are you planning for your own retirement, you're planning somebody else's retirement too, because they need to have support after you're gone. You know, so there is an element of that. But let's let's talk a little bit about some of the planning that you guys do before all that. What's the what are some of the first steps?
SPEAKER_02When a family comes into the office, if they're not linked with the county board of developmental disabilities, I tell them that's where that's something that they should definitely do. Um so the a diagnosis of autism is it often happens after people are out of the hospital. It's three, four, five, six, seven, e even on up. And so the the County Board of Developmental Disabilities is the entity that sort of coordinates services and benefits for individuals who have a developmental disability. So I I tell people that's that's the place to start. What do you tell them, Derek?
SPEAKER_01Same thing. I completely agree with you. The you you want to get connected with the different government agency programs as early as you can. That doesn't mean they're gonna roll out a red carpet and change everything that happens in your life, but getting enrolled in those benefit programs, um, there are programs like Help Me Grow and other programs that the earlier you get into, the better. And then just protecting eligibility. Protecting eligibility for services, even if you're not actively receiving them, is important. And so that that's where I would tell families to focus early. So when you say eligibility, um, what what's all involved with that? What are what are these families eligible for? We talk about having a developmental disability. We talk about how we define it. We define it at a federal level and we define it at a state level. And so the initial thing to do is make sure that you meet the state's definition of having a developmental disability. And that's what you do by going to the County Board of Developmental Disabilities. The County Board of Developmental Disabilities, they certainly coordinate and help provide some benefits that are federal in nature. So they help coordinate uh things like Medicaid waivers. That's something that's usually not going to come to you real early in life. In fact, a lot of people don't get it until much later into adulthood. But there's also local programming, and this does vary county by county. This is why it's important to support your local property tax levies for county boards of developmental disabilities. A lot of the local services they provide are funded through those levies, and what's available can make a huge difference in the life of a family. So it may be something as simple as parent information groups or parent support nights or nights where you have an occupational therapist coming and talking to families, or a physical therapist coming and talking to families. It could be, you know, respite care, things like that. The county board has a lot of authority to use its local funds for just about anything that improves the life of one of its um participants or one of its clients. So getting enrolled and making sure that you have that service coordinator assigned and they can kind of walk through life with you and be apprised of what's going on and where you have extra needs, that can make a big difference.
SPEAKER_02The other benefit that you hear people talk a lot about is a Medicaid waiver. That's that's sort of something that's on the lips of every single parent who has a child with a developmental disability, is a Medicaid waiver. Because they the idea is that that Medicaid waiver is what's going to provide the services for that child if they need it after mom and dad are gone. So my stepbrother is a person who communicates nonverbally. He lives in a house owned by my stepmom and he has 24-7 support. So 24 hours a day, someone else besides my stepmom is in the home providing um food for Mark, getting him up in the morning, making sure that he can get to the YMCA, making sure that his swing is working properly. All of those things are provided and paid for by a Medicaid waiver. What's interesting though is that you know you hear the term waiver and you think it's not Medicaid, and that's not that's not it's actually Medicaid. The the reason they call it that is because at the federal level, um, in order to provide services in the community and not in institutions, uh the federal law had to be waived. And so federal money spent at the local level for things like transportation to and from work, job coaching, um, occupational therapy, remote supports, 24-7 uh nursing care in someone's home required that federal law be waived. So Ohio s went to the federal government and said, Hey, will you waive these rules that said we have to provide this an institution? Yes. And so then Ohio said, okay, we're gonna call them waivers because it's a waiver of the federal rules. Okay. And I think that's an important piece because I didn't understand it until I started working in the in the community, even though, you know, growing up with my stepbrother, I heard the term waiver. I didn't know what it actually meant.
SPEAKER_00Yeah, I imagine there's probably a community of families, especially early on in their process. They're all talking about different things, they're hearing that phrase, they're hearing other things being thrown out there. And you you say, Well, okay, I guess that's what we need to be doing, but you don't really know what exactly it is that you're doing.
SPEAKER_02Correct, correct. I think that a lot of people come in, they know that they want a waiver, but they're not sure why. Or they'll say, Well, we're we're never gonna get a waiver. And that's not true that they won't ever get one, but it is based on the needs of the person with a developmental disability. Um, there's this idea what they call natural supports. So a person who is in their 40s, who uh is living in an apartment with supports is going to have more needs, gonna have less natural supports than an eight-year-old who's living in her parents' home and goes to school every day. Though she has natural supports versus a 45-year-old person who lives in an apartment, they're they're gonna have less natural supports. So the waiver needs to pick up those supports. You were you were asking uh earlier about when families start. So I think that for me, most of the time I see families when uh the children are somewhere between seven and twelve. Um I think that's when people kind of get their feet under their ground. Okay, we've got we're in school, kids are in school, um, they've gotten their IEP, and now we can start thinking about something other than maybe the health and the school. Okay, we're gonna start thinking about this. We know we need something that we've heard called a special needs trust. Come we'll come in and see Logan and Derek.
SPEAKER_00Yeah.
SPEAKER_02We have something so those families certainly we're gonna do some estate planning for them. But then there are other times that they need to to be thinking about other benefits. We have something we call the planning pathway so that no matter at what stage a parent comes in or parents come in, we put the child's birth date in our system. So then we contact people at 17 and six months, letting them know, hey, that's a time to start thinking about SSI and um guardianship or supported decision making. 16. Um, that's when the county board does a different kind of assessment. 21, all those different times we automatically reach out to clients because we know they have so much to think about.
SPEAKER_00Now, you know, this is uh, you know, a podcast about financial topics, and obviously this is there's a lot of financial aspects to this planning. Um, you mentioned special needs trust, people hearing that probably in their communities or in a maybe a presentation they were attending, not sure exactly if they need it or not needing it. Um, so maybe we could talk through a couple of of examples of why you know someone might need that and what happens as the child gets a little bit older, and maybe they can start to work a little bit. Uh And they have income and how how do all those things connect?
The $2,000 Rule Changes Everything
SPEAKER_01First thing I always tell families is contrary to popular belief, everyone has an estate plan. You either have an estate plan you create for yourself or you have the estate plan the government created for you. The estate plan the government created for you does not work when you have a child with a developmental disability. It will disqualify them from benefits. And when you have a child with a developmental disability, you well, let me back up. All parents become advocates for their kids. That's just part of being a parent. When you have a child with a developmental disability, there's an extra gear to the advocacy. And there's a lot of things that you're going to go through and advocate for and attain for your child. And the last thing you want is to spend your lifetime advocating for the better life for your child and then die and have your death mess it up. And so the importance of the planning is that you have a plan. It just doesn't work. And so we we have to create a plan that does work so that you can leave assets behind for your loved one with a developmental disability and not have your death mess up their quality of life.
SPEAKER_00And kind of thinking through an ex a sample of that or example of that, you have an ad now adult child, let's say, uh, and they're they're set up on a lot of these systems and programs that you guys help coach families with. So things are looking good. They they advocated for them, but they didn't do the estate planning aspect of it. Parents pass away, maybe they had two kids, their assets will go to probate, life insurance proceeds, retirement accounts, you know, different things like that. Their children will split it. I'm I'm oversimplifying it, but split it to their children, um, which seems like, okay, great, they get half of the estate, but that can cause a real issue with the child with disabilities if they're on SSI or they're on some of these different platforms.
SPEAKER_01We keep talking about benefits. And we talk about, you know, you have to have a special needs plan and that kind of stuff. All of these different benefit programs have two layers to them in terms of being eligible. There's the the level of care or the qualifying disability. You have to have a qualifying disability and meet that level of care criteria. The second component on all of these is financial. And from a financial standpoint, to be eligible, they look at your assets and they look at your income. Income limit, you mentioned work earlier. I always tell clients for your loved ones with developmental disabilities, we want you to pursue as much employment as they can reasonably attain. I've I've never told a client, don't get a job or don't work. We can always work around employment. There's a lot of different ways we can do that. Um, that's not to say you can have unlimited income and receive these benefits. You can't. You can outwork your benefits, but that's a success story if you do. From an asset standpoint, it's a really, really harsh threshold. Uh the asset limit that we primarily face is a$2,000 asset limit. And that's been in place. I I'm I'm gonna get this wrong, but I want to say since like the mid-90s, and it's never even been raised for inflation. Yeah. And so what that means is every year, based on inflation, people with developmental disabilities are allowed to have less in terms of assets. So that's the criteria. So if in your example, mom and dad die, they've got two kids, it's going to go to the two kids. Um, the problem is it's going to be more than$2,000. So they've just lost eligibility for these benefits. You can regain eligibility for these benefits, but there's going to be a long, lengthy period of ineligibility while you get eligible again. And then when you do get eligible, it's not going to be with the same flexibility, comfort. It's not going to be with the same ability to use the assets. There's going to be ongoing expenses. There's going to be more restrictive types of trusts in vehicles that control your assets. So planning before death is absolutely critical because the options you have before death are not available after death.
SPEAKER_02So one of the things that you mentioned right away, Mark, was uh the idea of a special needs trust. I think that most families hear that they need a special needs trust. And um what's interesting is that they probably don't want a special needs trust. That's because when you tell Medicaid or Social Security, the Social Security Administration, that you have a special needs trust for your child, there's a payback provision in a special needs trust. So the term special needs trust is actually defined in the Ohio revised code. And it says assets in the trust, think of a trust like a treasure chest, assets in that treasure chest will not count against the beneficiary, can be suspend for the beneficiary, but when the beneficiary dies, the assets in that trust pay back Medicaid for the services that have been provided. And in that scenario that you just gave, we would be in a special needs trust scenario. So the kind of the way to think about it is mom and dad die, they leave half their assets to the child with uh special needs. That child is ineligible. We can get that child eligible by using a special needs trust. But that is a lot of work generally for typical sibling who is who's also inheriting. So what we talk to clients about is that uh we want to get ahead of that. And the central piece of that plan is what's called a third-party discretionary trust. So think of it again as a treasure chest. It's got all the benefits of that special needs trust. It doesn't count, can be spent for the individual uh with a disability. But when that beneficiary dies, it doesn't go back to the government. It can go to the children of the beneficiary, it can go to the siblings of the beneficiary, it can go to a charity of the parents' choice. So that's the big difference that we often uh show people because they've heard, hey, we need a special needs trust. Well, not really. What you want is a third-party discretionary trust.
SPEAKER_00Okay. So kind of the first step of that is that it is a trust, has its own tax ID. It's it's no longer in the possession of the child, right? So that that helps from the eligibility perspective. The other the problem though is this at the end, uh, you know, for them, does it go back to pay for m for those Medicaid expenses, which I imagine are a lot. So it probably eats up quite a bit, um, or just all of it in most cases, versus doing, you know, one of these other kinds of trusts that has more of that flexibility to then go to other family members, or you have the decision to make there.
Trust Planning That Protects Benefits
SPEAKER_02Yeah. So the the scenario that you gave, um, parents pass away, no plan, probate court goes goes to the two children. We're gonna create a special needs trust for that beneficiary. That trust, so again, treasure chest keys, the trustee is the person who has the keys to it. Rather than that just being the sibling who decides how to spend that money, what to purchase for the beneficiary, likely a judge is gonna be involved there too. So you've got two keys a judge with a key and the sibling with a key. That judge is gonna want to know every time money is spent, and every year is going to know, want to know how it was spent. So every single year we're talking about a budget and an accounting down to the penny of what came into that trust, what income that trust earned, everything about that trust.
SPEAKER_00And most, I mean, most anybody, 99% of people in this country couldn't do that for themselves, let alone for somebody else. It's out of the way. Ton of work.
SPEAKER_02Yeah. So we we help families to get a special needs plan in place that has a third-party discretionary trust. So the money never goes to the child with special needs. Instead, it goes to a trust for that child with special needs. I'm gonna brag on Derek. Uh Derek is on the board for the state of Ohio for the stable account. Derek would never tell you this.
SPEAKER_00But so you know something about it.
SPEAKER_02I have been riding Derek's coattails literally since your filters out. Since we talked in 2005, right? Like where whatever he does, it's it's great. I go work, I get in a room, everybody knows Derek, and I just get to say, Oh yeah, I'm with Derek and doors open everywhere.
STABLE Accounts And Smarter Saving
SPEAKER_01If only that were the case. Um no, stable accounts are a wonderful tool, but it's like any tool, you have to know when and how to use them to get the most out of them. But I'm I'm a huge fan of stable accounts, and and all families who have loved ones with developmental disabilities need to know how to use a stable account to incorporate it into their planning. So to understand stable accounts, you have to understand what used to happen. So we have that$2,000 asset limit. And that means by the end of every month, your account balance has to be below$2,000. And what what we used to have happen all across the United States, and it was absolutely tragic, is at the end of every month, providers would walk into group homes, and I'm let's say there's three guys that live in this group home. They would say, okay, Mark, you've got, you know,$1,000, or I'm sorry, you've got$2,050 in your checking account, you need to get in the van. Logan, you've got$1,800 in your checking account, you can stay here. Derek, you've got$2,010 in your checking account. Get in the van. Those people that had more than$2,000 would get in the van, they would go to Walmart, and they would be told, this is how much money you have to spend today so that we get you back down below$2,000. Didn't happen a few places, it happened in many places. These individuals would just frivolously spend their money to get back down below$2,000. So in uh the mid-2010s, at the federal level, they passed legislation called the Able Act that allows states to create checkings accounts and savings plans for people with developmental disabilities where they don't have to frivolously spend the money. Instead, they can set it aside and save it. The state of Ohio has been a real nationwide leader in that department. They added the ST to make it stable. Um, and they've done a phenomenal job of building out their stable program. So a stable account is an account where you're limited in how much money you can put in it per year. For this year, you can put$20,000 in a stable account. So you can put$20,000 in a stable account in a calendar year, and that money does not count towards the$2,000 asset limit. There's no fee for the account. Now you don't go to your bank and open a stable account. You open it online through the state treasurer's office. But you open that account, you have a debit card, you have online access to the money. It's great. It's great for people so that they don't have to frivolously spend money at the end of every month. I do worry that because we're not having people frivolously spend the money that we put it in a stable account and forget about it, and that's not good either. You need to use the money so that it improves the quality of people's life. But you don't have to frivolously spend it. So if I'm a person with, you know, Down syndrome or cerebral palsy or something and I want to save up for a vacation or a big expense, that's my vehicle for doing so. It doesn't necessarily work from an estate planning standpoint because most parents are going to have more than$20,000. They want to leave to their loved one. And so it does not at all impact who needs a third-party discretionary trust. But if you do have those kind of those one-off situations where grandma says, at my death, every grandchild gets$5,000, then a stable account's very beneficial because you can take the$5,000 from grandma, put it in a stable account, and it's protected.
SPEAKER_00And I was thinking, as you were saying that, this is probably a good vehicle for just general giving. If a family member says, hey, I want to give them a couple thousand dollars, they could put it into the stable account for them.
SPEAKER_01Yes, to an extent. So if it's if it's regular giving, I would still recommend looking at something else, like maybe an account in the parent's name that's payable on death to a discretionary trust. Stable accounts, they're great. And if you want to give that gift to a stable account, that's fine. And if they're using the money out of the stable account even better, then that's absolutely what I would do. Stable accounts used to be subject to Medicaid payback, meaning when the person died, the money was going to go back to the state of Ohio. They're no longer subject to state Medicaid payback, but they remain subject to federal Medicaid payback. Meaning if the person who has the account dies after the age of 55, there's a high likelihood that the money left over in that account is going to go back to the government. Okay. So for a couple of different reasons, I still don't recommend people just wholeheartedly put money in it every year, uh, especially while they're young, because if you get more than$100,000 in a stable account, and first of all, I think you've done something wrong if you have more than$100,000 in a stable account. But if you do, you lose eligibility for SSI. And so uh you have to be careful. They're great for smaller fund situations. I wouldn't recommend just wholeheartedly putting$20,000 a year in it if you're a parent. I think that's a really, really bad idea. Trevor Burrus, Jr.
SPEAKER_00So this is not not really designed to be a retirement account for them. It's more of a functional day-to-day, you know, month-to-month, year-to-year type of account so they don't lose that eligibility.
SPEAKER_01Trevor Burrus, Jr. And as a parent with a trust, I designate who's going to be in charge of that money when I'm gone. So for my daughter, Megan, I can say this is who's going to be in charge of Megan's inheritance when I'm gone. You know, Logan uses the analogy of the keys to the treasure chest. I get to hand those keys to someone. With a stable account, the money belongs to the individual. So when I'm gone, there's no way I can dictate who's going to be in charge of that stable account on her behalf. And that has some problematic aspects to it. Trevor Burrus, Jr.
SPEAKER_02One of my favorite things to do is when a client comes in, um, get out our whiteboard and draw a third-party discretionary trust, a special needs trust, and a stable. Um, talk about why we want to have that third-party discretionary trust put a big X through the special needs trust, still have the stable, and then talk about SSI and how we can use the stable account to maximize their uh the the beneficiaries' SSI payments. Um because that's that's that can be life-changing money, and the stable account is a really, really good tool for that. Um back to what Derek said about the van and uh people going to Walmart, I actually had a client who came in and they talked about how they could only buy so many Legos. Um their child was 19 years old, worked uh at a uh local grocery store, and at the end of every month they would go out and buy Legos. And uh we helped them. Actually, it was great because it was before 2016 when the stable account became operational. So we had a special needs trust and then we switched that to a stable account, which allowed the individual to have more control over his money.
SPEAKER_00I think my kids could challenge that too much Legos concept, uh, especially when they get into the Star Wars ones that are thousand dollars per set.
SPEAKER_02Yes.
SPEAKER_00Uh which we've avoided so far.
SPEAKER_02We just bought my uh my 15-year-old who um spends lots of times on his iPad and his Xbox playing with his friends, and then uh he wanted a very expensive Lego set for his birthday. We got him it because anything that gets him away from the screen. I mean, he he has I hope he doesn't listen to this because basically he could have any Lego set he wants uh because it gets him away from his screen.
SPEAKER_00Yeah, there is some good thought process, you know, you're going through those instructions, a lot of probably too for for kids, dexterity and small pieces, and there's some good stuff to that.
SPEAKER_02Uh dude, you don't have a 15-year-old. It I don't give I don't I don't care about dexterity or reading directions. All I care about is that he's not in front of a screen talking with his buddies, shooting zombies or you know, whoever it is that whatever it is that they're doing.
SPEAKER_00I can imagine. Yeah. Already seeing the early stages of all of that. Yes. I really, really appreciate you both walking through this. There's so much to it. I hope that listeners are starting to get some of that clarity of these are some of the things that we should be looking into. But at the same time, even getting that clarity knowing it's probably even better to have a partner walking with us, telling us to do, you know, you need this, you don't need that. Uh, I think that's true in so many different aspects from someone's personal financial planning and estate planning all the way to the more uh complex situations like you're describing. So I think, you know, probably step uh one or one of the first steps is finding that partner. If you're if you're a family that's going into one of these or in one of these situations, find those partners that can come in, guide you through this process. Uh, because it's not just a one and done, as you guys know, right? It's something that evolves throughout their lives, your lives, uh, and you need to be able to walk through each of those steps.
Social Security Strategies And Closing
SPEAKER_02If if I could, I want to bring up something that I think is really important for families that um lots of people don't talk about and their planners, their financial planners don't talk about because they don't know it. And that's something called disabled adult child benefits. Um that that will have a huge impact on when a parent chooses to take retirement from the Social Security Administration. So we've thrown around some numbers or some words here and some acronyms. So SSI, that's supplemental security income. A person can apply for that at the age of 18, it's$994 a month in 2026. But a person who has a developmental disability, a developmental disability, when their parents retire, they can often collect on the parents' work record under the umbrella of Social Security Disability Insurance in a program called disabled adult child benefits. And that is up to one half of the parents benefit when the parent retires without reducing the parents or their spouses, and then when the parent dies, 75% of the parents benefit. So we have clients in our office who say, Well, I'm gonna wait until I'm 72 to retire. Yeah. And that's because they they do they they read online, oh, it's 8% more per year, all of that. But if you have a child with a developmental disability and that child's gonna take half of your payment at 67, maybe that's when you want to take it. And whenever I do uh CEs for financial planners, I always have the financial planners scribbling uh down that when we when we cover that.
SPEAKER_00That's a big difference.
SPEAKER_02And many planners aren't aware of it, they don't have the software to figure it out. So that's a huge reason to come in and see someone like you uh or Andy because that it's a it's a huge difference. And you guys know this work. And I think I think it's great that you're having us on, not just because it's us, but because it's about special needs planning. And there's so few financial advisors who are aware that it's different for families with children with special needs.
SPEAKER_00And and uh, you know, we don't know everything, uh, you know, obviously, but we at least know enough when families are in these situations. It's very easy for us to say, you gotta go talk to Derek and Logan. You know, those those guys know what you need to be doing. Um, and so sometimes that's the most valuable thing to know you need to talk to somebody because you know there's all these different elements that you need to be considering. Um, so that's always a an easy choice for us. Um so much, so much we could continue to to dive into. Have us back. That's exactly what I was thinking. We're gonna have to do phase two here and dive into some different nuances. But uh, I really, really appreciate you both carving out some time. I know you've got full schedules of uh families that you need to go help. Um, but thanks for joining the podcast here today.
SPEAKER_01Thank you, Mark. Yeah, thank you very much for having us, Mark.
SPEAKER_00So, like we just talked about, special needs planning isn't about controlling the future. It's about creating clarity, flexibility, peace of mind for the families that are involved. Again, Logan, Derek, thanks for joining us today, bringing your expertise, and thank you for all the great work that you do for your families. I'm Mark Beaver, and this is the Financial Opportunities Uncovered podcast brought to you by Keeler and Adler Family Wealth. If you have questions about anything discussed on this podcast or you'd like to get in touch with the team at Phillips and Graham, connect with me through my email, mark.beaver at kanwealth.com or visit our website. Any past performance discussed during this program is no guarantee of future results. Any indices reference For comparison, are unmanaged and cannot be invested into directly. As always, please remember investing involves risk and possible loss of principle. Please seek advice from a licensed professional. Keeler and Adler Family Wealth is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Keeler and Adler Family Wealth and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Keeler and Adler Family Wealth unless a client service agreement is in place.