Growing number of families with members with disabilities who will be cared for by siblings.
Raiya Ellsworth may be only 5, but she already faces an immense responsibility: some day, she will become the guardian and caregiver of her brother, Ryan, 7, who has autism.
Raiya and Ryan are representative of the challenges faced by a growing number of families with members with disabilities who will be cared for by siblings - whether those siblings are ready and equipped for the job or not. But unlike many families, the Ellsworths have planned extensively, including naming Raiya as Ryan's eventual guardian and purchasing a whole life insurance policy to provide the permanent protection, guarantees and flexibility needed to meet Ryan's future needs.
"We want to equip Raiya with the support and resources she needs to be the best caregiver she can be when the time comes, and to make sure we're being fair to both of our children," said Lori Ellsworth. "We are counting on her being our eyes, ears and hearts when we're gone, and it's so important to us that they have a strong, loving and supportive relationship that isn't complicated with financial stresses or responsibilities."
By contrast, many parents of children with disabilities who put off choosing a guardian and establishing a plan of financial support are putting at risk their disabled children's future care and, unwittingly, potentially creating hardships for their other children, according to experts and parents.
The problem is compounded when parents assume that one of their children, typically the oldest, will become guardian of the child with disabilities but don't discuss the issue openly, according to experts. As a result, siblings can be unprepared to perform the duties involved and have inadequate financial resources to do so.
"There are legal issues, education and health care challenges, and financial and future planning concerns," said Ryan Platt, a certified Special Care Planner with Hinrichs Flanagan Financial, a general agency of Massachusetts Mutual Life Insurance Co. (MassMutual), in Charlotte, North Carolina. "These factors become even more complicated as the child ages. A mistake in any of these areas can have a severe impact on the quality of life of the person with disabilities. That's why it's so important to communicate and to plan."
The Ellsworths' preparation is more the exception than the rule, according to James Traylor, head of Special-Care Planning at Financial Architects, a MassMutual general agency in Rochester, NY, who will one day become guardian of his own sister, Nathalie, who has disabilities. His parents undertook extensive planning, including purchasing second-to-die whole life insurance that will pay a benefit that will ensure Nathalie's continued care.
"Most parents face such time-consuming demands to provide day-to-day care that long-range planning can be pushed off," said Traylor. "But that can create a lot of difficulties for a sibling who is unexpectedly thrust into the role of caregiver without any preparation. In my own experience, my parents, Nathalie and I are all confident about what the future holds, and that gives each of us great comfort."
Putting together a plan does not have to be overwhelming. A Special Care Planner can quarterback a family's efforts. "In addition to receiving specialized training in estate and tax planning, trusts, and government programs, Special Care Planners also are trained in the emotional dynamics of working with families with children with disabilities, including addressing the delicate issues regarding siblings and guardianship," according to Joanne Gruszkos, director of the Special-Care(SM) program at MassMutual, a coordinated program for life-care planning.
While there are many considerations to establishing a comprehensive life care plan, among the most important is creating a Supplemental Special Needs Trust, which can be an effective vehicle for maintaining the lifestyle of the child with disabilities while preserving the child's eligibility for governmental programs.
Whole life insurance is particularly useful in funding such trusts because of its permanence and guarantees and the flexibility provided by its cash values.
To oversee the trust, parents should choose a trustee. This person does not have to be the same as the guardian or caregiver. In fact, in many cases parents separate the duties to avoid overwhelming one person with too many responsibilities. Many families choose to name a corporate trustee to handle the tax reporting and investments while a family member or friend manages the care of the person with the disability.
Parents should also take care to write and update their wills, ensuring that each coordinates with the other. They should also consider writing a Letter of Intent that, while not a legal document, provides important information about the disabled child's routines, contact information, medical issues, and other such matters.
For more information and resources, including free guides that can help you start your planning and a fillable Letter of Intent template, visit www.massmutual.com/productssolutions/individualsfamilies/lifestages/specialneeds.
The Special-Care Planner certificate program is offered by The American College in Bryn Mawr, PA, exclusively for MassMutual financial professionals, who receive advanced training in estate and tax planning, special needs trusts, government programs, and the emotional dynamics of working with people with disabilities and other special needs and their families.