Awareness, planning, and coaching around trade offs can help clients manage the acute needs of their children into adulthood and past the lifespans of the clients themselves
Liz Lepore knows that she will be supporting her son financially for decades after she passes on. Lepore is the VP of Advisor & Client Experience and Practice Management at iA Private Wealth. She is also the mother of a child with debilitating autism. Her son will never go to college, never work a job, never earn an income. Lepore’s financial plan does not just need to account for her and her husband’s retirement, it needs to cover the lifelong needs of her son.
At the start of Autism Acceptance Month, Lepore is using her platform within the financial services industry to highlight how advisors can help parents in situations like hers, and to celebrate the remarkable work they already do. She explains the myriad ways a child with a disability impacts her daily finances, her financial plan, and her estate plan. She highlights the steps her advisor has taken to help her and emphasizes some of the ways other advisors can move to help their own clients in similar situations manage a deeply challenging lifelong circumstance.
“Advisors play such a critical role in providing the right advice to clients to help them manage the day to day and to manage the future,” Lepore says. “The future is the scariest part. The human element of the discussion is key to managing that, with my advisor truly understanding my personal circumstances and helping me decide how to balance government benefits, taxation, estate planning, and trusts…Even for me as a professional in this business, it can be hard to manoeuvre. But an advisor who can do this work well makes a difference in a family’s life, creates a sense of loyalty, and a sense of connection.”
As they engage with the parents of children with disabilities, Lepore says advisors need to practice empathy first and foremost. They need to listen to these clients and understand what the challenges they face on a daily basis actually are. From that position they can help clients lift their eyes from the all-consuming nature of living day to day with a special needs child and focus them on long-term planning decisions that need to be made as early as possible to deal with the financial implications of a child with disabilities.
A financial plan that goes beyond your client’s lifespan
Lepore breaks down those financial implications into three distinct categories: disposable income, the financial plan, and the estate plan. A child with disabilities is a significant strain on disposable income. When Lepore put her son in gymnastics, for example, she had to pay not just for instruction but for one-on-one support. Everything becomes more expensive. Advisors can help manage those expenses through budgeting work, understanding the client’s income, their spending habits, and what can or needs to change to manage the daily cost increases in these circumstances.
The financial plan is an area that needs to be overhauled quickly once a parent learns their child has a significant disability. Lepore says that the plan she had before her son was diagnosed could not be more different from the plan she has now. Her retirement date has been pushed back well beyond the so-called ‘freedom 55’ and her goals are now focused on saving enough to support her son for decades, rather than just trying to live her retirement dream.
“That great commercial of two retirees on a yacht sailing into the sunset, that picture is not me,” Lepore says. “The responsibility of an advisor is to be transparent about that with their client. I appreciate when my advisor had that rude awakening conversation with me…I will likely not be on that sailboat, and I’m comfortable with that, but the realization took time and a conversation with my advisor.”
Lepore emphasizes the importance of making these planning decisions early because children with disabilities are entitled to much more additional government support. Once those children become adults with disabilities, they are entitled to far less. Those are the years that Lepore needs to plan for more diligently and she needs to make use of the support she has now to maximize what she can save for the future so she can build an estate that will support her son.
Estate plans for children with disabilities
Lepore’s estate plan needs to account for both of her children, one who has disabilities and one who does not. It needs to cover how she will pass on wealth to both children with an acute focus on her child with disabilities, who Lepore knows will not be able to work in future. In Lepore’s will she clearly states that the assets she plans to pass to her son with disabilities will go into what’s called a Henson Trust. By keeping the money in a Henson Trust, it will be protected against any clawback of government benefits that Lepore’s son is entitled to.
The specific interaction between government benefits for Canadians with disabilities and a client’s estate plan is an area that Lepore believes all advisors need to focus on and learn more about. While she praises the work advisors do and emphasizes the help they provide so many clients with, she says that the industry as a whole can work to learn more about some of the specific programs, benefits, and regulations that govern this area.
The estate planning work also includes settling on a designated person who can manage assets and care for the child with disabilities in the case that their parents pass on. That is a challenging decision that many parents need help making. It also requires an understanding of powers of attorney and insurance products that can protect against bad outcomes.
Shouldering burdens as an advisor
Lepore is effusive with praise about her own advisor and the wider industry. She tells other parents of children with disabilities to find an advisor and begin working with them, because they can be the coach that those parents need.
“I already have enough stress dealing with the day to day of my personal circumstance. My advisor has lifted some of that pressure off of me, because we’re doing the plan and we’re thinking about the future. No matter how difficult or emotional some of those conversations are, or how direct people need to be, I think advisors need to have those conversations. Not many clients know about Henson Trusts, or tax codes, or investment and insurance products that can help them. Advisors need to continuously educate clients, because if they are educated, they are prepared. By doing that, advisors will make a priceless impact on their future.”
