Many people associate the term "financial wellness" with things like saving for retirement, paying down high-interest debt, or creating an emergency fund. But when you're living with a disability (or caring for a loved one who is disabled, "financial wellness" can take on a whole new meaning. Below, we'll discuss some of the unique factors and considerations to take into account when you're on the path to financial wellness—and living with a disability.
Creating a Life Care Plan
Because everyone's circumstances are different, there's no one-size-fits-all when it comes to a life care plan—but a life care plan is designed to outline your or your loved one's specific care needs throughout your life. Depending on the nature of your disability, this can include plans for in-home skilled nursing care, family care, assisted living, or a nursing home. You'll also want to include the factors to consider when deciding whether more intensive care is needed.
This life care plan can be created in conjunction with your physician, a home health aide, or your financial professional. It will include descriptions of the care that may be needed both now and in the future, along with a breakdown of costs where available. By having an outline of care in front of you, you'll be far better equipped to decide what you need and how best to pay for it, and a financial professional can work with you to decide your next steps.
The Special Needs Trust Decision
A special needs trust is one way to preserve assets for future care while still maintaining eligibility for Medicaid and other social assistance programs.1 In a special needs trust, a physically or mentally disabled (or chronically ill) person can receive regular income from the trust; but because the trust principal isn't available to the beneficiary, it's not "counted" for purposes of benefit eligibility.
Because Medicaid and Supplemental Security Income have strict asset limits, someone who receives a windfall (like an inheritance) can be booted from the rolls, even if this windfall isn't nearly enough to pay for their care needs. However, if this windfall is placed outside the individual's direct reach through a special needs trust, to the government it is as though it doesn't exist.
Protecting Yourself and Your Dependents
Although some individuals with disabilities may find it tough to purchase life insurance at a reasonable cost, it's worth looking into this option—particularly if you're young. Not only can life insurance benefits help pay funeral and burial costs, but they can also help compensate family caretakers or others who may have left the workforce to help provide your care.
Looking Into Alternate Resources
The Community Reinvestment Act (CRA) is a law that requires banks to provide support for less-economically-stable communities, including those with disabilities. The National Disability Content Provider: WriterAccess Institute (NDI) has a number of different programs designed to make the CRA's requirements more accessible and available to the disabled community.2
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
1 https://www.investopedia.com/terms/s/special-needs-trust.asp  https://www.lcplfa.org/about-life-care-planning
Sources https://www.lcplfa.org/about-life-care-planning https://www.investopedia.com/terms/s/special-needs-trust.asp https://www.state.nj.us/humanservices/dmahs/clients/snt.htmlContent Provider: WriterAccess https://www.forbes.com/advisor/life-insurance/life-insurance-with-disability/ https://www.federalreserve.gov/consumerscommunities/cra_about.htm LPL Tracking 01-051408