The Whole Financial Picture for Special Needs Families

These are one attendee's notes summarizing Tyler's presentation for educational purposes. They are not legal, tax, or investment advice, nor an endorsement of any advisor or product. Figures (benefit rates, contribution limits, tax deductions, fees, and Medicaid rules) change frequently and vary by state and situation — verify current rules and consult a qualified attorney, tax professional, and financial advisor before acting.

Notes from July 19th - Tyler Davidson - The Whole Financial Picture

• Tyler came to this work through personal family experience: a close family member with a developmental disability, for whom he and his wife will one day be caregivers.
• During COVID, his wife (a nurse) saw families arrive at the hospital without the legal documentation to make care decisions for an adult child with disabilities. When his own family checked, they realized that being the parents of an adult over 18 did not automatically give them that authority — which drove them to set up the proper documents and inspired Tyler to shift his practice toward special needs planning in 2020, making this kind of planning information more accessible to families who might otherwise face steep professional fees.
• A key theme throughout: one size does not fit all. Not everyone needs a special needs trust; not everyone needs an ABLE account. These are the tools that exist — what fits depends on your situation.
• It takes a village: Tyler covers the financial and legal side, but a full care team also includes a benefits specialist, professional trustee/trust officer, care & case manager, doctors/nurses/therapists, education specialists, community supports/advocates, and family & friends.

Legal Planning - Traditional Estate Documents (everyone needs these)

• Living Will - outlines your wishes for end-of-life care (e.g., ventilators, blood transfusions, DNR).
• Healthcare Power of Attorney - appoints someone to make healthcare decisions for you; often someone with a healthcare background.
• Durable (Financial) Power of Attorney - appoints someone to manage your finances when you can't; often a different person with a financial mind.
• Last Will & Testament - directs the probate court on how assets are distributed and names an executor. It does NOT avoid probate.
• On probate: probate is the public, court-supervised process of closing out your estate, typically costing 3–5% of the estate in fees. Everyone should want to avoid it. Free ways to do so: POD (payable on death) designations on bank accounts, TOD (transfer on death) on investment accounts and property, and named beneficiaries on IRAs/401(k)s.
• Revocable Trust - avoids probate and provides continuity for specific wishes after you're gone. It does NOT protect government benefits — that's the job of a special needs trust (you may need both, and not every family needs a revocable trust).

Legal Planning - Additional Unique Documents

• Guardianship - legal decision-making authority for personal and medical decisions. The most extreme option: the court process requires establishing that your child cannot make decisions for themselves, it's stressful, and it's difficult and expensive to reverse. Make sure it's the right fit before pursuing it.
• Conservatorship - the same authority on the financial side (high-profile celebrity conservatorship cases are a reminder of how difficult and expensive they are to undo).
• Supported Decision-Making Agreements - a less restrictive option where the individual appoints a trusted person to help guide decisions while still making their own. Tyler's analogy: like bowling with the bumpers up — the bowler still rolls the ball; the bumpers just keep it out of the gutter. Kansas recently passed a law giving these agreements more teeth, so supporters can actually use the document to help make decisions.
• Representative Payee - a person appointed with Social Security to manage SSI/SSDI payments for someone who can't manage them alone.
• HIPAA Release Form - authorization to access/disclose health information.
• Letter of Intent - a non-legal but critical guide for future caregivers: daily routines, likes and dislikes, foods, coping mechanisms — every nuance about your child. Update it annually. Tyler recommends The Arc's ~15-page PDF-fillable version (attached below) and keeping it digital so it's easy to update and share.
• Special Needs Trust - a trust specifically designed to preserve means-tested benefits (SSI, Medicaid) — see below.

The 3 Types of Special Needs Trusts

• First-Party SNT - funded with the individual's own assets (e.g., a settlement after an accident, or assets owned before a late-in-life disability). Gets them below the $2,000 SSI resource limit. Subject to Medicaid clawback at death.
• For a disability with onset at age 46 or later (e.g., an adult traumatic brain injury), an ABLE account isn't available — a first-party SNT is the vehicle.
• Third-Party SNT - funded with someone else's assets (parents, grandparents, siblings). What most families set up. Does not count toward the $2,000 resource limit, no Medicaid clawback, and you choose successor beneficiaries. You can have unlimited third-party trusts, but most families set up one and share its title with relatives who want to leave the child something.
• Pooled SNT - a first- or third-party trust run by a nonprofit (Tyler recommends Arcare). Cookie-cutter documents and investments, but little to no setup cost — a good fit for estates under roughly $100,000. The nonprofit charges more on the back end; for first-party pooled trusts the nonprofit typically retains ~20% of what's left at death, while Arcare retains nothing on third-party pooled trusts.

Structuring notes:

• A revocable trust can direct a specific child's share into the special needs trust (e.g., three kids, one with special needs — that child's share flows to the SNT so it doesn't jeopardize benefits, while the others inherit normally).
• Ballpark attorney costs: will + powers of attorney ~$1,000; revocable trusts ~$3,000–$5,000; special needs trusts ~$5,000–$10,000.
• Employer legal-benefit plans can work for simple wills and POAs, but they're closer to cookie-cutter template documents — special needs trusts usually need a specialist attorney. Tyler is happy to make attorney introductions.

Financial Planning - Planning for Two Generations

• The special needs planning timeline has far more stages than a traditional one — and having a professional who understands each stage matters.
• Go from the traditional retirement pyramid to the Special Needs Planning Wheel: government benefits, risk management, legal and estate planning, community resources, transition planning, and lifetime care funding are all equally weighted alongside retirement. Government benefits are often why you're able to retire.

• What to look for in a financial planner:

• A specialist, not a generalist - look for the ChSNC® (Chartered Special Needs Consultant) designation: an advisor who understands benefits, Medicaid/Medicare, how to structure plans without jeopardizing eligibility, and what lifetime care will actually cost.

• Independent, unbiased advice with fiduciary duty - e.g., a CFP® (Certified Financial Planner), which carries a fiduciary duty.
• Relationship-driven, not transactional - the plan must adapt as rules, laws, and your family change.
• Aligned with your personal goals and beliefs - e.g., access to USCCB-screened Catholic funds or excluding specific stocks.
• Coordinated with your entire care team - estate planner, CPA, benefits specialists, case managers.
• Inherited IRA rule change: inherited IRAs must now generally be liquidated within 10 years — but a child with a disability can still stretch distributions over their lifetime, typically at a lower tax bracket. So consider leaving IRA assets to the child with a disability and step-up-in-basis assets (home, non-qualified accounts) to the other children.
• Quantifying future care costs: Tyler's firm partners with National Care Advisors, which produces a full cost-of-care report (around $3,500 as presented) — the two-minute Special Needs Map video shows what the report covers. Worth considering especially for families weighing a job change or a move to another state, where benefits work differently.
• Choosing a trustee: Trustee options vary widely: some bank trust departments carry high minimums (e.g., $2M) and vary in their familiarity with special-needs plans. Tyler's preference is an independent trustee that allows the family's outside advisor to stay involved and has a lower minimum. A family member as trustee can work, but consider whether they're better serving as an advocate than as the gatekeeper to the money — a professional trustee may be the better fit. Worth a conversation with an attorney on whether a professional trustee is required.

• Tyler's process:

• First, discuss the ideal life for your child — if you could wave a magic wand, what does their life look like in 30–50 years?

• Evaluate where you are today with a Lifetime Care Planning Scorecard (ten 1-to-10 confidence questions) and a Fact Finder.
• Project the future gap between what's covered (benefits, supports) and what's not, using the Lifetime Care Funding Needs Assessment (both worksheets attached below).
• Decide whether to fund future caregivers too — e.g., leaving $1,000/month to the family member your child will live with.
• Create the plan, coordinate it with your legal and benefits team, and keep evaluating normal retirement readiness along the way.

Risk Management & Insurance

"Insurance isn't just about coverage - it's about protecting years of planning from life's biggest risks."

• Term life - covers a set period (e.g., a 30-year mortgage); the most benefit for the least cost early in life.
• Permanent life - for needs that will always be there: burial expenses, or making sure your child is taken care of once you're gone.
• Second-to-die (survivorship) life - covers two people, pays at the second death (often used to fund the SNT/caregivers). Caveat: you may still need a first-death benefit — if the breadwinner dies first the family loses income, and if the primary caregiver dies first the survivor has to pay for care.
• Child riders - add ~$25,000 of coverage on a child without underwriting.
• Long-term care hybrid - life insurance that allows early access to the death benefit for home healthcare or nursing care.
• Group benefits - health insurance, HSA/FSA, and especially short- and long-term disability coverage during your working years.
• Personal lines - home, auto, and umbrella coverage, often customized for home modifications, medical equipment, and accessible vehicles.

ABLE Accounts

Tom Treacy gave a full ABLE deep-dive at our May 2026 session - see his notes and reference list for more.

• What it is: the Achieving a Better Life Experience (ABLE) Act (2014) created tax-advantaged savings accounts for individuals with disabilities — structured like a 529 (a "529A"), administered by the State Treasurer's office. As of September 2025, ~223,000 accounts have been opened holding ~$2.87 billion — but the average balance is just over $12,000. Kansas accounts open at savewithable.com.
• Eligibility: disability onset before age 46 (raised from 26 effective this year) that moderately-to-severely limits basic life activities. You qualify via SSA blindness criteria, SSI/SSDI eligibility, or a physician-signed disability certification — and you self-certify using a simple form your primary care doctor signs off on.
• Ownership: the individual with the disability is always the account owner/beneficiary — but unlike UGMA/UTMA accounts, they do not automatically take control at 18; a parent can remain the authorized co-signer. It's one of the only accounts the individual can own without it counting as an asset.

• Contributions:

• Up to $20,000/year (the federal gift-tax exclusion amount).

• 529 accounts can be rolled in (counts toward the annual limit) — useful when a college 529 turns out not to fit. Assets can also transfer in from a special needs trust.
• If the beneficiary is working and not in an employer retirement plan, they can contribute an additional ~$15,960 (up to 100% of earnings). Note: those wages still count toward Substantial Gainful Activity — the ABLE account shelters the resource, not the income.
• Contributions get a Kansas state tax deduction and grow tax-free; withdrawals for qualified disability expenses are never taxed.
• Limits: up to $100,000 in the account before it starts counting as an SSI resource. Medicaid is never impacted by the balance.
• Medicaid clawback: Kansas has no state clawback (only the federally required Medicaid long-term-care recovery, age 55+). Missouri does have a clawback dating to when the account was opened.
• Qualified Disability Expenses: almost anything — education, housing, transportation, wellness, legal fees, financial planning, employment training, assistive technology, funeral. It's easier to list what's not covered (drugs, gambling as a habit, extreme luxury items).
• The housing advantage / rent strategy: if someone on SSI lives rent-free with their parents, SSI is cut by one-third (In-Kind Support & Maintenance). Because ABLE-paid housing is not counted as ISM, a rental agreement with rent (~$400/month, the standard rate in case studies) paid from the child's ABLE account restores full SSI. That rent is taxable income to the parents — a small cost to recover the missing third of SSI.
• A third-party SNT cannot pay housing without triggering that reduction (its language is to supplement, not supplant benefits) — so one legitimate (but technical) approach is rent-recycling: charge the individual rent, move the money from the SNT into the ABLE account, then pay the rent from the ABLE account. Set it up with your attorney and benefits specialist.
• At the owner's death: the account must be closed (a taxable event on the deferred growth) unless a sibling with a disability inherits it. List a beneficiary; remaining funds can still be spent on final qualified expenses.
• What you need to open one: authorization documentation (e.g., birth certificate for a parent opening for a child), name, addresses, birthdate, SSN, state-issued ID, email, bank information, and a general investment preference (checking-style option for spending vs. investment options for growth; you can change investments only twice a year).

Working & Benefits

Dollar figures below (SGA thresholds, SSI rates, work-incentive amounts) are 2026 amounts as presented — verify current figures with SSA before acting.

• The fear — "my child can't work or they'll lose benefits" — is only sometimes true. You just have to be careful with how much they earn. Social Security also offers work incentive programs (with the underlying goal of eventually getting people off benefits).
• SSI vs. SSDI: SSDI is earned through payroll taxes; SSI is needs-based income for someone who has never (or barely) worked.
• Substantial Gainful Activity (SGA): the monthly gross-earnings threshold for SSDI/DAC recipients — $1,690 (non-blind) or $2,830 (blind). Earn below it and SSDI continues; above it, SSDI generally stops (subject to the work-incentive programs below).
• Impairment-Related Work Expenses (IRWE): disability-related costs needed to work (service animal, specialized transportation, adaptive equipment) are deductible from countable income — keep records. A regular bus fare anyone can ride doesn't count; a hired driver because no route exists does.

• Work incentive programs:

• PASS (Plan to Achieve Self-Support) - set aside income/resources for a specific approved work goal (training, equipment, business start-up) without counting toward the $2,000 SSI limit. Be as specific as possible in the application (see also SSA's work incentives overview).

• Trial Work Period - 9 months (within a rolling 60) to test working on SSDI regardless of earnings; in 2026 a month counts at $1,210 gross (or 80 self-employed hours).
• Extended Period of Eligibility - 36 more months of SSDI for any month earnings stay below SGA.
• Expedited Reinstatement - for 5 years afterward, benefits restart quickly if work stops.
• Ticket to Work - free employment services (career counseling, vocational rehab, job placement) through Employment Networks; disability reviews are postponed while enrolled.
• How earned income impacts SSI: subtract a $20 general exclusion, a $65 earned-income exclusion, and any IRWE; divide the remainder by 2 — that's the SSI reduction (roughly 50 cents per dollar earned).
• Example: on full SSI of $994/month, earning $500/month with $100 of IRWE → countable income $315 → reduction $157.50 → net take-home $1,336.50 — in this scenario, working meaningfully increased total income.
• How unearned income impacts SSI: unearned income (like Disabled Adult Child benefits) reduces SSI dollar-for-dollar after the $20 exclusion.
• Example: $900/month in DAC benefits reduces SSI by $880 → net take-home $1,014 — only ~$20 more. DAC benefits don't stack on top of SSI.
• Disabled Adult Child (DAC) benefits: an adult child with a disability can receive 50% of a parent's Social Security benefit while the parent is living (once the parent claims) and 75% after the parent's death — but only off a parent who paid into Social Security. This makes when a parent claims part of the planning conversation.
• Still confused? Use the FWM Social Security planning calculator to model your own numbers.

Tools & Community Resources

• Sensory-friendly movie day - Saturday, August 16th, 2:00 PM at B&B Theatres on 135th, sponsored by Cornerstone Wealth Management, BOK Financial's trustee department, and Sunflower Law. Free admission and concessions — register via QR code, and don't worry about taking too many spots. See our Community Events page for details.
• The Arc's Life Plan Letter of Intent - the fillable booklet Tyler recommends (attached below), from The Arc's Center for Future Planning.
• eMoney vault - Cornerstone's planning platform includes a shared/non-shared document vault, so documents like the Letter of Intent, trusts, and insurance policies live in one place a family member can always access — instead of a filing cabinet of 30-year-old expired policies.
• Targeted Case Management of Kansas (Sarah Otto, our March 2026 speaker) - TCM services are Medicaid-funded once you're on the IDD waiver; before that, families can private-pay. Case managers frequently refer families to special-needs financial planners rather than the reverse.

Speaker Contact

• Tyler Davidson, CFP®, ChSNC® - Cornerstone Wealth Management
• 10561 Barkley Street, Ste 200, Overland Park, KS 66212
• Office: (913) 766-9924 · Email: [email protected] · Web: www.CKCWealth.com