For Bill Christiaanse, business is often personal. At Bank of America Merrill Lynch, he helps families of children with special needs figure out how to financially provide for their child over a lifetime. He’s also the father of Matt, a 26-year-old who has autism, which means he knows firsthand what it’s like to worry about making sure Matt’s housing, health and other expenses are taken care of—now, and 40 years from now.
As a Merrill Lynch Financial Advisor with the Certified Special Needs Advisor designation, Christiaanse is one of a handful of 1,000 Merrill advisors around the country who can take on the complex and sensitive issues surrounding special needs children and their families. Working out of Stamford, Conn., he’s an expert in Supplemental Needs Trusts, or Special Needs Trusts, which are designed to protect the assets of a person with a physical or mental disability.
To aid families through the initial process of starting a Special Needs Trust, Merrill recently launched a Special Needs Calculator, which helps parents project how much they will need, at retirement, to provide for their child, based on certain financial information and the child’s projected life expectancy. The calculator can take into account expenses such as a child’s monthly health care, housing, special education and transportation expenses, as well as his or her projected employment income, and state or federal government benefits.
Plugging basic information into the calculator is somewhat of a wake-up call. Parents with $100,000 in annual household income and plans to retire in 25 years will need more than $1 million at retirement to care for their child. “Most people are shocked at what the numbers look like,” Christiaanese says. But with the right approach, “it’s doable,” he adds.
Merrill calls the calculator a “conversation starter,” a way to get people to see their options, and take action to preserve their assets so they can be passed onto their children. Special Needs Trusts serve this purpose well: These monies are not considered countable assets for purposes of qualification for certain governmental benefits. That means a child can still collect government benefits, or other third-party income sources such as a personal settlement. Without such a trust, benefits will cease if a special needs individual’s assets exceed more than $2,000 in his or her account at any time—which, if it happens, can be draining on other family members. “Most people don’t even know that they can’t even leave money in their savings account,” says Christiaanse.
There are other companies that provide special needs planning and calculators, including MetLife, which sells life insurance, too. Many independent special needs consultants offer services, yet, Merrill has the benefit of a wide range of resources from which a customer can draw, including advisors specializing in insurance, trusts, managed care, and taxes.
For example, Christiaanese is knowledgeable about federal government benefits, and can recommend lawyers who can help families navigate Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). For the most part, SSDI is a better option for special needs individuals; it provides larger financial benefits as long as the person is disabled by age 20.
Christiaanse says he feels good about how he has planned ahead for his son, who lives in an adult life skills center for people with autism and other disabilities. He knows not to leave his full inheritance to his daughter, who is not disabled. A non-disabled sibling holding assets for the benefit of a disabled sibling could be subject to such liabilities such as judgments from automobile accidents, a bankruptcy, or a divorce.
He is a supporter of, though not overly impressed with, the recent introduction of the 2011 Achieve a Better Life Experience (ABLE) Act, which would allow families of children with disabilities to put monies into a 529K-like savings account for healthcare, housing education, technology and transportation expenses. Unlike the original 2009 bill, which had a maximum allowable cap of $500,000 in savings, the 2011 version would give states the ability to regulate the accounts using 529 college savings regulations. It also prohibits anyone with more than $100,000 in the account from receiving SSI benefits. Christiaanse says this savings vehicle, as currently designed, will be a good law for families if it passes, but won’t remove the need for a special needs trust for families with significant assets. “Saving for education through a 529K is a one-shot goal; it’s not the same as providing lifetime support,” he says.
The best advice Christiaanse can give families is to start when their child is young, and to be realistic. Things get complicated when you don’t know what kind of life your young child will end up having. Will he work? Will she live independently? It’s those questions that cause a lot of parental anxiety about whether they’ll have enough resources. “Like all of us, we get caught up in the day-to-day,” Christiaanese says. “But if you start when your child is young, and you do long-term planning, it will work in your favor.”