Special Needs Trusts, Benefits & Financial Planning with Mike Walther | Beyond Expectations Podcast Ep. 15

In Episode 15 of Beyond Expectations: Parenting Autism, Michelle Chabolla and Sean Dobson are joined by Mike Walther, founder of Oak Wealth Advisors, for an eye-opening conversation about special needs trusts, government benefits, financial planning, and preparing for the future of a loved one with disabilities.

Mike shares how his own family’s experience inspired him to help families navigate the overwhelming world of special needs planning. Together, they break down SSI, SSDI, Medicaid, ABLE accounts, trustees, life insurance, and the critical decisions families face when planning long-term care and financial security.

This episode is packed with practical insight for parents and caregivers who want to better understand how to protect benefits, avoid costly mistakes, and create a long-term plan that supports their loved one’s independence and quality of life.

Learn more about Oak Wealth Advisors: http://www.oakwealth.com

This episode is proudly supported by Gregory’s Special Creations. If you are looking for thoughtful and unique gifts while supporting Greg's growing small business, visit: http://www.gregorysgifts.com

Transcript

SPEAKER_01 0:00

Welcome to the podcast Beyond Expectations, Parenting Autism. Follow the challengeable journey of raising the channel with autism, the challenges, victories, and rewards. If you're a parent caregiver or simply someone seeking to understand autism on a personal level, you're in the right place.

SPEAKER_03 0:20

Okay, here we are beyond expectations. And today we had Mike Walthers. Is that how you say it?

SPEAKER_00 0:28

Walther. Just Mike Walther, just one of me. Yep. Thank God. There's only one.

SPEAKER_03 0:33

With Oak Wealth Advisors and of course Sean Dobson, my younger brother. So here we are, Mike, and we're very excited to hear Mike. All right. Back to where we were, Mike.

SPEAKER_02 0:50

Welcome, Mike. So, Mike, where's home? Where where is Oak Wealth Advisors located?

SPEAKER_00 0:55

So we are essentially a virtual firm. We have offices in Northbrook, Illinois, which is a suburb of Chicago. That's essentially where the firm was started 18 years ago by me. We have an office in Madison, Wisconsin. It has several advisors in it. We have a single advisor at this point working for us out of the Raleigh, North Carolina area. And I am in the process of opening up our Nashville office, which will be in Brentwood, Tennessee, in the next couple of weeks. So we're all over the place.

SPEAKER_02 1:20

That's amazing. So uh we so yeah, maybe if there's no one better than you to explain what services you you guys provide and uh sort of who you're helping. And maybe I think also when you talk about your firm, it'll be awesome to find out what motivated you to get into this line of work.

SPEAKER_00 1:37

I appreciate those questions, Sean. So Oakwealth Advisors was founded because, as a sibling of a brother who's on the autism spectrum and was born with multiple developmental delays, autism wasn't diagnosed from until he was 32. So he was born back in 1969, there was no autism diagnosis to be given. So he had profound challenges with his development, profound challenges with school challenges integrating as an adult. So, in looking at my parents' issues and concerns around planning for their future with him and planning for his specific future, I did a lot of homework. And as a financial advisor all throughout my career doing tax planning and investment management for very wealthy families, I thought I had all the resources I need to assist my own family. Well, it turned out I didn't. In fact, it was very difficult to find 20 years ago any information that was objective and not sales-oriented regarding how to plan for the loved one in your life who's got a disability. So 18 years ago, I found that Oakwealth Advisors do exactly that. Our mission is to help as many families as we can with whatever planning they need to better support their loved one. Whether that's finding and maintaining governmental resources, which can be worth millions of dollars over a loved one's lifetime, whether that's finding really credible attorneys to take care of creating a special needs trust, which becomes part of the family's estate plan, whether that's making them aware of things like Able accounts and SNAP benefits, which are extra benefits that our loved ones with disabilities are entitled to receive from the government, which also have incredible value. And the ABLE account is a relatively new tool, which is a tax-free savings account. So making sure that families are aware of all the different benefits that are out there, how they work together, what the rules are, then helping them basically reach all their goals more efficiently by taking things off their plate, both emotionally and administratively, is what we do. Now we come by way of investment management to getting to this point. So for most of our clients, we're managing the family's wealth. But in some cases, we manage no dollars and simply provide ongoing financial and special needs planning advice.

SPEAKER_02 3:47

Oh, that's amazing. So we talk about this in our family a lot because um I'm in the investment management business, I'm in the financial services business, and uh my specialty is fixed income. So we're always thinking about things on a 10, 20, 30 year basis. And and Michelle Michelle has promised that she won't cry during this episode. So undermined. So I think that that it's a hard thing to talk about, and you must have to struggle with those with your clients because if in in our case, the with Gregory, um, his his disability, I don't think affects his lifespan, right? So our so if all things go well, he'll outlive his mother by a very long time, by thir 20, 30, 30 years. I was 30 when I had him, so yeah. Right. And so so she'll live to be 100, and he'll live to be 100, and so there's a 30-year gap there because mom is not only the caretaker every day, and caretaking is complex for Gregory, and she's not only the developmental leader, and she and the whole point of this podcast is for her to share her experience because the outcome has been so amazing with Gregory, but she's also the earner, right? And she's the financial manager and she's and she's the the sort of guardian in many, many ways. And so at some point, that responsibility is going to fall on someone else. So, how do people get their heads around planning for something 30 years long, 30 years in the future?

SPEAKER_00 5:13

Uh, Sean, you hit on the key point of why clients come to see us. And it's why we have tissues in every meeting room, because inevitably it's an emotional discussion. And it's probably every single parent's biggest concern, if they're really being honest, is what happens when I'm gone. And so the best we can do is to listen to them, understand what their loved ones' strengths and weaknesses are, what their biggest concerns are as a family, what resources they have to contribute towards their loved ones' future, then help them fill in the gaps, understand where the resources are, and what the best practices are for special needs financial planning. And then they can choose to engage us on an ongoing basis or take that information and go run with it on their own. But the special needs prayer that families always pray is that I hope I live a long and healthy and happy life, and I lived one day longer than my loved one because that issue of what happens when I'm gone in those 30 years of dread of like, oh my God, I can't possibly have someone else provide the level of care that I've been providing. No one's going to know what I know. I know you've talked with my colleague Randy Gillespie about the importance of a care guide or a letter of intent and how you document all those daily activities of living and strengths and weaknesses and goals the individual has, if they can't communicate that themselves. On the financial side, it's making sure that whatever resources the family can contribute when the parents are gone, or a single parent is in many cases, that that's structured so that the vast majority of that money goes to the individual, not to the government, not to taxes, and doesn't get wasted in some other way. So understanding how retirement accounts work for an individual with a disability and how it's different if there's other siblings involved, and then making sure that the family makes the best decisions they can make as to who gets what assets. In a situation where there's only one child, it's a little bit easier. But we often come across the complex decision for a family with multiple children, or well, how do I do this evenly? Do I give each kid one third? Do I give it all to my kid with a disability? There's no right or wrong answer. And parents come to us looking for the answer, and we simply tell them, you can't get this wrong. All you can do is put in what you want to have happen right now and then revisit it. Maybe in five years, your other children are very financially successful, and maybe they want to have all the wealth that might transfer to their generation and go to their sibling with a disability. That's my own brother. My parents were adamant that everything gets split between my brother and myself. Well, I'm far better off financially than my brother is. Right. But if he can inherit everything from my parents, he'll at least have a fighting chance of having enough resources. And I realize I'll probably have to pay for some of what he needs in the future directly. And that's okay with me. But the idea that I'd take half of their inheritance and then need to spend it on him anyway made no sense for me financially. So having that education with the family about what are the resources, what makes the most sense. And if a family has very limited resources, knowing what kinds of trusts can be created so that whether it's 10,000 or 20,000 or nothing, that the best available resources are going to that kid, because it's often going to take hundreds of thousands of dollars to get a professional trustee involved, if it's going to be just managing your account. But maybe we'll talk more on this podcast about how a pooled trust works, where people with less resources can have their monies going to a common account that's managed centrally and benefits multiple different beneficiaries. So it really depends on a family-by-family basis as to what the right structure is going to be. But being able to find a place like Oakwealth Advisors that can advise them based on their specific circumstances, what their options are, and then they get to make the decision.

SPEAKER_02 9:02

Wow. It seems intimidating. I'm I'm just wondering where do you start? It seems like Michelle, so can we pick on you? What are you doing? Have you started?

SPEAKER_03 9:10

Well, I haven't even started the letter of intent from last week with Randy. I'm still crying about that.

SPEAKER_02 9:15

So the other one, the way I understand it is that so there's sort of two streams of work, right? There's the letter of intent, which is about care and documenting the things that that the person needs that might be unusual or might be peculiar or might just be different, but it's a detailed documentation of this is uh this is my question, Michelle. It's like food and preferences and and irritants and that type of thing. So that's one stream of work is like how do you care for this person? The other stream of work is about money. And the money piece gets complicated because I guess there's inheritance tax issues and there's income tax issues. I remember something with Gregory where there's like a there's are there like income tax thresholds that affect other benefits and things? So there's like a tax, there's like a just do you have enough money issue? And how do you budget, Mike? How do you tell people this is how much money you need?

SPEAKER_00 10:07

All great questions. We'd actually almost think of it as maybe being three streams. One is the care and planning, which the letter of intent addresses. That's the non-financial piece that really can be the most important piece that a parent leaves behind so that their loved one's care can be maintained as close as possible to what the loving parent was providing when they were here. Then I'd say there's a legal piece. The legal piece and then the financial piece. And the legal piece and financial piece overlap to a degree because they're all going to be focused on governmental benefits. And how do we make sure that the legal structure for the family, whatever that is, the wills, the powers of attorney, the trust documents, all those reflect what benefits the loved ones either getting or they hope will receive in the future, and making sure those are structured so that those benefits can be obtained and retained throughout the individual's lifetime. By being able to do that correctly, those governmental benefits worth millions of dollars can be part of the support structure for the finance. Then making sure that the financial piece is done thoughtfully so that when there's an inheritance, we're not having it go to Uncle Sam, but rather go to the individual as best we can, understanding how trusts get taxed differently than individuals, understanding what a proper investment strategy might be, because as you mentioned, it might well be 20 to 40 years of life without a parent. And so it's not a short-term investment horizon, it's a long-term investment horizon for that loved one. So making sure that that trust is written to reflect that investment need of a long-term investment goal. And then even looking at things like insurance. Many families will turn to life insurance as a funding mechanism for what they're going to provide for their loved one, which is great, because obviously insurance is a way to leverage up your assets and then leave a tax-free benefit to someone in the future. The problem that we will see is understanding life insurance. And unfortunately, the life insurance industry is not great at explaining the differences to a potential customer. They just want to sell a product. And so if we're trying to protect Michelle's earnings for the rest of her career, term life insurance can do that. But term life insurance doesn't hold any value and no death benefit. Past age may be 70 or 75 on the long end. And if Michelle wants to live to be 100 in your example, Sean, that's not going to work very well. That life insurance won't provide anything for Gregory if Michelle outlives the term of that policy. So we want to look at a permanent type of insurance policy if that's what Michelle chooses to do to provide for Gregory's future finances. Now, permanent policies cost much more than term policies because in a permanent policy, it's going to have an investment component. So a portion of every premium dollar goes into an investment pot that either will eventually pay for the policy itself 20, 30 years out, or can at least reduce the cost in the long run or provide a bigger death benefit if that's the family chooses. So it has more flexibility to it, but it's a far more expensive insurance product than term life insurance. So for each family, understanding what resources they have and what they think those costs might be, and looking for the shortfall, and maybe covering that shortfall with insurance. And it'd be great if we had the answer. If we could look at Gregory and okay, Gregory at this age needs exactly this much money for the rest of his life and be sure of that number, that'd be fantastic. As smart as we are, and as much experienced as we are have at Oak Wealth Advisors, we have no idea. That's a horrible answer to give a client. They come in there with all these concerns, and we look them in the eye and we tell them we have no idea how much money your loved one's gonna need for the rest of their life. But we can look at what the available resources are. And based on what you have, based on what the government will provide, and based on what you think you can accumulate, we can then tell you how much Gregory will have if you die at this age or that age or the other age and project back here's the income stream. In today's dollars, that would cover this much in terms of services. So maybe we should be looking for resources and living arrangements that can be paid with that much money. Or if we need more money, let's look at insurance policies. Can we get something in place that's cost effective to deliver the gap between what we want to have for our loved one and what we can provide ourselves?

SPEAKER_02 14:36

That seems so complicated, right? Because you because you sort of take a look at today's dollars, future inflation adjusted values, the mix of needs. And what about health insurance? What happens for health insurance, right? Now, Michelle's buying it and covering it, whatever. What happens, what happens about how what happens with health insurance?

SPEAKER_00 14:53

Great question. So it really depends on the individual and their abilities and their work history. Let's say that the individual has never worked. In those cases, when they're an adult, which is age 18, they can apply for and receive Medicaid. And Medicaid will be their backup insurance policy if there's anything else available. A parent can provide it during their working years, great. Private health insurance is always gonna be the primary payer. Medicaid's last. If all the individual has is Medicaid, that will be their health insurance. When a parent retires or starts receiving retirement benefits and the individual's never worked, after two years of the parent receiving their Social Security benefit, their loved one can start receiving Medicare in addition to Medicaid they may already be receiving. So you could stack those. It could be possible that the loved one with a disability can have Medicare and Medicaid both in place when the parent stops working.

SPEAKER_02 15:57

So Medicare is good. I guess the question that pops to mind is it it just sounds so complicated. So is there like an implementation plan that kicks in? Like does someone have to become sort of the trustee that knows all this stuff and takes over?

SPEAKER_00 16:10

That's a funny point because many times families think the trustee is going to be the solution to everything. Right. The reality is the trustee is only going to be in charge of managing the assets in the trust hard stop. They're not the decision maker. They're not the one reading the care guide and figuring out, oh, you know what? Gregory really likes this kind of toothpaste and hates that kind of toothpaste. Not the trustee's job. Trustee's job is to be prudent with the investment management of the assets in the trust, make sure that the distributions for Gregory's benefit are appropriate and don't cause any loss of benefits because certain distributions from a trust can cause a loss or at least decline in the amount of benefits that the individual receives. So they've got to be knowledgeable about special needs tax law and trust law. They've got to be able to file a tax return every year for the trust because a trust is just another type of an account. And we all know when we have investments in our accounts, we have to pay taxes on those accounts. The trust may be the taxpaying entity. It may be that the trust makes distributions out to the individual. Those distributions can carry out the tax impact of the income that trust generated. So it really comes down to planning and doing things most effectively for the family. And then to your point about the trustee's importance, it's a really, really important role in that loved one's future. So having a professional that knows how to do that job really well is often an expense we want to budget for. Having a relative do it who is well-intentioned, but not skilled in all the areas of financial management and trust law and tax accounting can be a challenge and cause other problems down the road.

SPEAKER_02 17:48

I'm sorry to say that again, Sean. We say a professional, a professional to do financial planning, investment management, tax planning, and compliance, sort of, like you said, the legal compliance side?

SPEAKER_00 17:59

Yeah, I'd say it really comes down to finding someone with the time, willingness, and ability. For those of your listeners who are of a similar age to the three of us, you might remember the airline. It was super helpful to draw a picture of an airline with TWA on the wing. Well, nobody of the younger generation knows what TWA was in terms of airlines. But if you have the time, willingness, and ability to do all those things you just mentioned, then fine. Let the relative do it if they have those skills. We find very few relatives have the time, willingness, and ability to be an effective trustee for their relative. So we're then telling the families. What are we talking about?

SPEAKER_02 18:32

This cost, if you find a professional to oversee those things on behalf of Gregory, what does that cost in $20?

SPEAKER_00 18:39

Yeah, the range is typically going to be one and a half to two and a half percent of the assets in the trust every year. So it's assumed the trust can generate a six and a half percent return. You're gonna be giving back to the trustee at least one and a half percent of that. So the net to the trust is gonna be something like five percent or less.

SPEAKER_02 18:56

Wow. And that compares to sort of normal investment management fees of half of that?

SPEAKER_00 19:01

Correct. So if you think of it, that's a good way of thinking of it, Sean. Maybe half the total cost of the trust management is the asset management piece, maybe one percent. The other one, one and a half percent is gonna be the trust services, the communication with the individual.

SPEAKER_02 19:18

What does someone need to have in this trust before it's worth it for the professionals to take on the take on the work?

SPEAKER_00 19:26

Depends on your community. In many cases, we're finding that trust companies don't want to touch a trust with less than $100,000 in it. In some cases, they want a quarter of a million dollars in the trust before they're gonna touch it. And they're cognizant of the fact that their fees, they have minimum fees as well. So we talked about percentage fees of the total assets in the account. But in many cases, the minimum fee could be as much as 5% on a smaller balance, which makes no sense because then the trust is never gonna have a return after fees.

SPEAKER_03 19:52

Right.

SPEAKER_00 19:53

So in those cases, we want to look at something called a pooled trust. Pooled trust I mentioned a little bit earlier is a way that you can take the individual's resource, whatever those dollars are, if it does not meet the threshold of a professional trustee in your community or in your state, they will then take those assets and give you an account within a bigger account called the pooled trust, where there's one trustee managing potentially hundreds, if not thousands, of accounts with millions of dollars in it. So the investment management fees are based on the one trust that the investment advisors are managing. And then there's separate accounting done so that each beneficiary can only pull out of the trust their pro ratus share of what went in.

SPEAKER_02 20:36

But I but I guess so. I get that in terms of like a mutual fund type setup, what you're talking about. But but I guess are we talking about what I missed is are we talking about a special kind of trustee service, a special kind of investment management service that's dedicated to people with special needs? Or is this any old trustee will do?

SPEAKER_00 20:55

I think a lot of trust companies have gotten more familiar with special needs trust planning and have declined to do the work.

SPEAKER_01 21:02

Really?

SPEAKER_00 21:02

So there's a much smaller subset of available professional trustees than there are overall trust companies. I would say probably, I'm making this number up, but it's from experience. Maybe 20 to 25% of trust companies will take on a special needs trust because they know they have to have the internal people who have that expertise to not run afoul of the special needs laws.

unknown 21:25

Right.

SPEAKER_00 21:26

They do that, obviously puts that trust company at risk for a fiduciary breach, and they don't want to do that.

SPEAKER_02 21:31

Right. Wow. So you're so you're you're searching around for that that particular offer. Now, is that what you guys do, or do you, or do you find that special needs trustee for someone?

SPEAKER_00 21:41

Right. We do not serve as a trust um trustee for anybody's accounts. So we will find attorneys, we will find professional and trust services. It could be either an individual group of people or it could be a trust company. In many cases, you can actually split the roles of trust management. From investment management. So if a family's got an investment firm they love working with, we can point them to some professional trustees that don't do the asset management piece, just do the administrative work. The check issuance for bill paying, the keeping up with trust laws, the filing of an annual tax return, the communication with the beneficiary about their needs and planning for cash flow. They'll just do those things and charge a fee for that. And then the investment advisor charges separately for the asset management. So it really depends what the family's needs are and what the resources are in the community. We might have a state where we don't know of an independent trustee that doesn't also require the asset management. That might be the family's only choice. And then there's the ability to have, in many cases, a family member be what's called a trust protector, which is a really cool planning tool that's come into use maybe in the last decade or so. What a trust protector can do is let's say we've got a relative who doesn't have the time, willingness, and ability to be the trustee, or the family prefer to choose a professional firm, which doesn't have a lifespan, right? They're going to always be there when Gregory or your loved one needs that trust service. We have to worry about that relative dying prematurely or moving away or just quitting. So we could have the relative who still cares greatly for your loved one be a trust protector. The trust protector's sole role is to hire and fire professional trustees and professional investment management firms. They don't do the work, they simply keep those firms accountable to the beneficiary of the trust, which is a really cool feature to have. That way you're not worried when you're dead that, oh, this trust company may stop caring about Gregory. Or the investment manager may start buying really stupid things and ruin the value of the trust when I'm gone because I'm not watching it. Well, the trust protector protects against that happening because they can replace any professional with another professional.

SPEAKER_03 23:56

And that can be a family member.

SPEAKER_00 23:58

Often is. In some cases, maybe there's two or three relatives, you don't want to pick one, you make it a trust protector committee, and then that group decides on hey, it's time to replace the trustee. It's time to replace the investment advisor. It's time to start all over and come up with one company that does everything because it's too burdensome to manage it separately. But it's their decision making on who the professionals are that are plugged in to manage the trust.

SPEAKER_02 24:25

Interesting. So can you survive without this professional trustee? Or is it just kind of table sticks?

SPEAKER_00 24:33

We think it's a best practice. Um, certainly you can pick a relative to do it. And then whatever shortfalls they have with either investment management or decision making or compliance or executive functioning and communicating with the beneficiary, that's what you're left with as a risk. That can be more cost effective if the family member will do it for free, right? We can save one and a half, two and a half percent, which is great. That that additional return goes right to the bottom line, and that's more assets for our loved ones in the future. So I like that. But I think there's a value to it. If you find the right professionals, they should be providing value above and beyond their cost.

SPEAKER_02 25:11

Now, did I was asking about healthcare insurance. Does this does this service cover making sure that that the beneficiary also has health insurance, or is that going to be someone else's responsibility?

SPEAKER_00 25:22

So it depends. The trust often is going to own the life insurance policy on the parent. Okay. So we can have the trust own it so that when the parent passes away, there's no issue of having it fall to the individual directly. That's a disaster. We want to always make sure that the beneficiary is going to be the special needs trust for the benefit of the loved one and not name the individual him or herself.

SPEAKER_02 25:50

So somebody asked a dumb question.

SPEAKER_00 25:52

There are no dumb questions in this space, Sean. This is questions you haven't got answers to yet.

SPEAKER_02 25:56

What a trust is. And one of these days I'm going to find out that I'm the beneficiary of a trust that Michelle set up for me with her lottery winnings. But what's the basically the difference between a special needs trust and a regular trust?

SPEAKER_00 26:08

Great question. So I should probably back all the way up and say that what is a trust? So a trust is really just a very formal type of an account that holds assets. Typically, brokerage type assets, you'd have investments. So stocks, bonds, mutual funds, money market accounts. That's typically a trust hold. They could also own real estate. They could own a house, they could own investment properties. They can pretty much own anything, but most people are going to have it be the typical investment assets in there. And it's simply an account. You can open it up at any brokerage firm in the name of the trust. But then what's important about that is when the initial person who sets it up, who's known as the grantor, when they pass away, the trust very smoothly moves on to another person who's managing it, that professional trustee and the examples we've just been discussing. And so that's an instantaneous transfer through the document as opposed to having an individual account, it goes through your will, then it's got to be probated through your state, and then it kicks over and eventually it benefits your loved one. The trust is very smooth. Once the assets are in there, they stay in there. It's just a matter of who's the beneficiary and when that trustee change takes over. And so that creates an efficiency for the family. And the difference between a special needs trust and a trust that the three of us might have, like a revocable living trust that oftentimes attorneys discuss for the reasons of avoiding probate, for the reasons of efficiency of asset transfer at death, that's about all a revocable trust is going to do. It doesn't provide any tax benefit because we pay income taxes on a revocable trust as if we own it directly. But a special needs trust, again, the tax planning is going to be unique to how the attorney establishes it. But when the person who sets up the trust, the grantor, when that person dies and the money that they're going to leave behind funds the trust, oftentimes the trusts are funded with no real assets. Maybe a $20 bill is sufficient for the state of your listener to make the trust valid. They have to have some money in there. And at that point, the trust is going to be paying the taxes. Okay. So we want to make sure that at that point we know how to do that, how to file a trust tax return. Because it's not going to flow out to the individual unless we make distributions out to Gregory or the individual of that trust.

SPEAKER_02 28:38

Right.

SPEAKER_00 28:38

And the major difference, the reason why the government says you can have an infinite amount of money in a special needs trust and not jeopardize the individual's access to government benefits is because the trustee, and it has to be in writing in the trust, the trustee is the only person with the discretion for making a distribution. That very specific language must be written in there with no other little caveats. It can't be unless Gregory really wants it, or unless Gregory wakes up 30 days. Right, but even more than that, Sean, the difference, I mean, any trust is going to really own the asset. The difference here is that Gregory or any other individual beneficiary cannot make a demand of the trustee for distribution. And in fact, the trustee can deny any distribution that he or she or they want to deny. It's at their sole discretion. And that language has to be in the trust written the way the Social Security Administration wants it, which is why it's so important to have an attorney who's familiar with this kind of work draft your trust. Yes, that might make it more expensive than other trusts, but the failure to have the proper language in there, and it's typically an extraneous clause. It's a standard clause in normal trusts that they failed to take out because they didn't know they had to, makes that trust an invalid special needs trust for purposes of protecting means tested benefits. And those means tested benefits, Medicaid and supplemental security income, are worth millions of dollars. So if we use the wrong trust, we spend five or $10,000 with an attorney, and we get a trust the Social Security Administration's not going to view as being a valid special needs trust, we just wasted our money. The whole point of that special needs trust is to protect the access to the means tested benefits. So it's super important to work with an attorney who is knowledgeable about this area and has had their trust documents reviewed by the Social Security Administration, and their clients have been receiving supplemental security income benefits after that trust was funded. In those circumstances, we know that the government's reviewed the trust, they like the terms that the attorney's using, and that's going to be an approved trust. We've had clients unfortunately spend those thousands of dollars only to have the Social Security Administration say, that's not a valid special needs trust. Now Gregory's got access to $500,000. Because he has more than $2,000 in his name that he's got access to, no more SSI benefit. And there's a whole bunch of other things we have to go through to fix that. So getting it done correctly in the front end is incredibly valuable.

SPEAKER_02 31:23

So as we wrap up, Mike, when you sit down with someone, this has been super viable. When you sit down with someone, because I, you know, I'm just fascinated by the numbers here, right? So so if you've got someone like Gregory who's who's hopefully the plan is he outlives his mom by long ways, right? That's the goal. Um give me the two numbers. Like how much money do you need to have in your hands to kind of set everything up properly? And then what's the what do you need to have tucked away here?

SPEAKER_00 31:55

Really hard to know. I mean, Gregory is a higher functioning individual, he's working. And in fact, a lot of things we talked about won't even be available to Gregory because of his employment, because of his earnings. If Gregory's business takes off and he's making more than in today's dollars, roughly $15,000 to $16,000 a year, ironically, the government will tell you he's not disabled for purposes of benefits. Mind-boggling for all of our families to hear that, oh, he's supposed to live on $20,000 a year the rest of his life? How many people are able to do that at a substantial level of comfort? I would say very close to zero. But that's the government's telling us right now is that if you can make the substantial gain flectivity amount of income on an ongoing basis, and the government's minds, ongoing basis is more than 12 to 13 months, once you meet that threshold, forget about that SSI benefit worth millions of dollars. You're not going to be earning your own keep. You're going to have to pay for yourself. And if you lose your job, if you become unable to work in the future, just like any other employee who loses their ability to work, you go on SSDI, Social Security Disability Insurance. You'd be able to start receiving your Social Security benefit earlier than typical retirement age. And that might be Gregory's path. Gregory may not be eligible for SSI. He might be looking at an SSDI path. And so that's something that's really going to be very case-specific to the family and that individual's ability to earn a living and what their needs are in the future.

SPEAKER_02 33:25

Ironically, it almost seems like it discourages work.

SPEAKER_00 33:29

Oh, it totally does. Sean, I'll tell you, one of the most difficult conversations we have with families is those families whose children are in high school. And they've got, you know, they're developing their skills and their abilities. And the parents still have a very positive outlook for what that loved one might do. Maybe it's going to be some college and higher education before a career. Maybe it's we want to start working right away after high school. And in some states, we can extend it out to age 21 or 22. We get services through the school system before they're on their own. Trying to use those transition years between 18 and 21 or 22 to develop those life skills, those employment skills. But to your point, it's kind of a risk-reward game we've got to play. If we're making too much money, if we create a level of success that's barely sustainable, $15,000 to $20,000 a year, the government's going to argue that yes, no matter what your disability is, you can still make money. You could have someone who is blind and deaf and quadriplegic, who somehow can move a paintbrush with their toes and make art that somehow the art community just loves and can make $100,000 a year. None of us are going to argue that a person's not disabled. But the government's going to say because they can make a reasonable living, why would we want to pay them on a monthly basis and provide them with Medicaid services? That's where we are. So the conversation becomes can we find a benevolent employer? Can we find someone who'll give them all the benefits of work, a place to go, a community of coworkers, um, something they feel good about producing? What's that? A sense of accomplishment. Absolutely. All the things that we get out of employment that are not necessarily the paycheck.

unknown 35:13

Right.

SPEAKER_00 35:14

And then if the paycheck can be such that it's it's appropriate for what they're able to do, but not run across those numbers we've been discussing, then all of a sudden we can get access to benefits, the means tested benefits, those ones that are incredibly valuable that provide the Medicaid and the monthly income amount, which is 994 at its maximum for SSI currently. That number gets indexed every year. That's a benefit there. If we're going to be higher earning, higher abilities, they're going to be looking at paying for our own needs for as long as we can. If we lose our ability to work, then we go on SSDI and Medicare.

SPEAKER_02 35:50

That's kind of wild. So if you earn $1,200 a month, it costs you $1,000 a month in benefits.

SPEAKER_00 35:58

Yeah, you start losing actually the after the first couple dollars, you get about $20 they'll exclude. Thank you very much. After that, you start losing one dollar benefit for every two dollars you're earning.

SPEAKER_02 36:08

Yeah, that's that's a weird incentive system. So what about the what about to get started? So if someone's listening to this and they've got a young child and they're thinking ahead. Um, so like to get started, to hire a firm, to hire, to set up this the lawyer you mentioned, um, what do they need to be thinking about to have when they walk into that office in terms of resources?

SPEAKER_00 36:28

I think the big thing is just to be well educated. I mean, go to our YouTube channel, Oakwell is going to be on YouTube. You can find articles there. You can go to our website and look for the publicly available information. Learn as much as you can about the planning before you got locked into decisions. Oftentimes families will come to us or other advisors after they've already bought a bunch of insurance products that don't meet their needs, or they've already gone and done their estate planning with an attorney who also helped them close their house and also sues people who run over dogs. You know, that's all fine and dandy, but they've used the wrong community resources for their needs. And so being a little bit more well-educated, listening to podcasts like yours to get the information that can help make better decisions, and then coming to find a financial advisor who's a fiduciary and ask the question of the person you're talking to. Are you a fiduciary? All attorneys are fiduciaries. I would argue that if an attorney should never take on a special needs client and draft a special needs trust. If they're not fully confident in their ability to deliver that at a level that the Social Security Administration is going to approve, they should outsource it to another attorney that they know that has expertise in that area. Now, does that always happen? No. Should it? Yes. And does the attorney have an obligation to do that? Yes. Similar on the financial side. If you go to someone and they say, Oh, we're not a fiduciary all the time, we're a fiduciary some of the time, ask the follow-up question. When are you not a fiduciary? Because a fiduciary means you have to do what's in the client's best interests. And so if you know when they're not providing that advice in your best interest, you can at least have your guard up and be a little more circumspect in responding with a yes or no and take more time to review what the costs are, what the benefits are of what they're recommending. And so for a firm like ours, we're a fiduciary all the time. What we're selling is our experience and our advice. And our mission is to help as many families as we can. So if you come to us and you want to talk to us about your problem, we're going to listen for free. And if we think we can help you and we can do it cost effectively, we continue to engage with her and you can start working with us. If we feel that your resources are not going to be sufficient to pay us on an ongoing basis, we'll help you find other ways of implementing your plan with advice that you can then implement on your own or with another firm that might charge less, maybe not have our experience. But we want to help families find the right information that they need to make the best decisions for their level on an ongoing basis. And hopefully there'll be more firms like ours in the future. We're actually in the process of teaching at multiple universities to try to educate the next generation of financial planners to at least be aware.

SPEAKER_02 39:02

I mean, the needs are in hundreds of thousands of families, right?

SPEAKER_00 39:06

Yeah, I mean, I think you guys have mentioned in your podcast before it's roughly 20 to 25 percent of all families have a loved one with a disability. Now, the level of disability is going to vary.

unknown 39:17

Right.

SPEAKER_00 39:17

Let's say it's even 10 to 15 percent. That's a staggering number of families that need some specialized advice. And I'll forgetting it.

SPEAKER_02 39:26

Millions. Well, this is this is fantastic. So the last question I have for you is it's now as we rap as we wrap up, uh Mike, you you have the you have the uh the honor of being the longest podcast so far, I think. This was amazing. So uh so what's the checklist that we can so we summarize this all up, Michelle. How do you think about it? Put you on the spot because you're the mom, and now you have this daunting task to go and start the planning process. Do you have like in your mind here's my checklist of my to-do list to get started?

SPEAKER_03 39:54

I do, I do, and I think everybody's like he said, everybody's situation is so different. Mine's different. I'm a widow. So my son's receiving my late husband's Social Security, so that's a whole different ballgame, right? I mean, that's different. He gets Medicare. I didn't know he was eligible for Medicare. That's kind of a funny, not funny story. There's all these things I think that you're supposed to know that you just fall into or you fall out of. It's it's very overwhelming. I didn't know it two years after his passing, Gregory was eligible for Medicare. I kept him on my personal my personal health insurance. Now he's penalized because he didn't take Medicare when he was supposed to. That's a I had no idea. I felt like I got in so much trouble. Like, what's it? So there's that, right? And then with the I think, and I'm not sure, with him receiving my spouse's Social Security, that's a different role for income that he can make.

SPEAKER_00 40:56

Right. And so, which also, I mean, we could do another podcast on state specific benefits, but the problem is Texas's way of delivering Medicaid services is different than every other state.

unknown 41:08

Right.

SPEAKER_00 41:08

So being in Texas, you need to know how the Texas system works and essentially how to work the Texas system, right? Flipping those words around. And that's really true for every family listening to this, is that you need to understand how your state system so so is the is the checklist right away to find out if Oak Wealth Advisors works in my state?

SPEAKER_02 41:26

Are you guys?

SPEAKER_00 41:31

So we're pretty well covering the globe. Um, we've got clients all over the place. But more importantly, to that, it's making sure that you understand your child as best you can given whatever age they are. If it's a two-year-old with a brand new diagnosis, we've got a lot of time ahead of us, but there's some basic things to put in place now, if God forbid a parent leaves the earth prematurely, right? Like in Michelle's case. I didn't know. So we want to make sure that right. We want to make sure that planning's in place early. Then there's other things that we kind of would bolt on to that as the child develops, starts seeing where those skills are, where the challenges might be. So on our website and other websites, you can find, you'll look for roadmaps that talk about, you know, these are the early stage planning things, these are the next stage planning things. And it's not so age specific, right? My my wife and my kids will tell you, I'm not a fully developed adult yet. I'm closing in on 60. So there's still hope for me, but you know, if we're talking about like this, these are the adult phases, like I wouldn't be doing those yet, and I'm 58 years old. But for every individual, we want to know like where are they on that developmental scale? Which should be the next things we're thinking about. And we as advisors and any individual looking at those roadmaps should think I don't have to do all 30 things. So Michelle and other parents shouldn't be feeling like they're overwhelmed. They should just work to get the knowledge of what are the next one or two things that are most important for my loved one, and let me go attack those. And also think of it as being a journey. The roadmap is done intentionally as a roadmap that you're on this journey. The finish line's way out in the future. Don't worry about getting there tomorrow. We'll help you get there. Others can help you get there. It's going to take a village, but if we understand, let's just do one or two things a year and improve where we were the year before, that's phenomenal progress. We should celebrate that and be happy about it and not be stressed about the fact that, oh my gosh, there's three more pages on this roadmap. That's fine. We'll get to them later. They're not all important today. Right.

SPEAKER_03 43:25

That's awesome. This has been great. I'm gonna have to go back and watch it like four times to absorb everything. But uh really good one.

SPEAKER_02 43:36

Mike, thank you so much. And I'm gonna spell it out because sometimes my accent gets in the way. It's Oak O A K Wealth, right? W E W E A L T H Advisors. Oak Wealth Advisors.

SPEAKER_00 43:49

Right. And the website's simply Oakwealth.com, and there's tons of free resources there. We really do want to help the community with whatever they need. If you can't find it on the website and you still have a question, just pick up the phone. Our phone numbers are on our website. We're happy to take them. those calls. Yeah, we want to help as many families as we can. We love your podcast for what it's doing to reach other families. Good work, guys. Thank you. Thank you so much.

SPEAKER_03 44:08

So much for being on. All right.

SPEAKER_02 44:10

All right. I'm sure you'll be hearing from us.

SPEAKER_03 44:12

Have a great day.

SPEAKER_00 44:14

Very good guys. Best wishes to everyone.

SPEAKER_03 44:17

Thanks.