This is the second in a four-part special report on special needs planning for advisors and their clients. In part two below, an example of how the calculator can help a family.
The financial planning portion of Merrill Lynch's approach to planning for special needs families, using the calculator, says Modesto, Calif.-based Merrill advisor Scott MacDonald, "is a starting point for more customized, sophisticated planning with an advisor if the client chooses" to pursue it. That is what MacDonald's team does "for hundreds of clients."
The 10-year-old group at Merrill has used previous versions of the special needs calculator in its planning, but the new version is more user-friendly, with easier inputs, says MacDonald (left), and allows, for example, a sliding scale to accommodate changes in expenses and income, as well as "links for input about what certain expenses might look like, and some guidance about what costs and needs [families] might need to foresee in the future."
The complexities can indeed be daunting, when a single well-meaning gesture by an uninformed relative can destroy a financial plan through a bequest or beneficiary designation that does not account for special needs laws and regulations and disqualifies a child for aid. Families with a special needs loved one, says MacDonald, are under a lot of pressure.
"They're forced to wear many hats," he points out; they have to "advocate for their loved one … at the school district to get them [educational] programs, to get them the resources they need for their disability. They also have to navigate the trusteeship of the child's assets, his health issues, care management issues, etc. It's a daunting task. Having basic or traditional advisors—financial, legal, health—doesn't really fulfill their needs; it's like trying to cure cancer with a GP [instead of a specialist]."
MacDonald offers an example of how the calculator can be used to ward off financial disaster. First was the case of a California family with a 6-year-old son afflicted with cerebral palsy and a paraplegic because of medical malpractice. The child "can't walk; eat normal food; feed himself; has very limited use of his arms and no use of his legs; can't communicate very well or speak well," says MacDonald, ticking off problems.
