South Florida Hospital News
Sunday June 13, 2021

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November 2017 - Volume 14 - Issue 5

Specialized Planning

Some financial planning situations require specialized advice.

These circumstances include families with special needs, LGBT, cohabitation, divorce, dual physician spouses, and alcohol and substance abuse.
Special needs loved ones can be emotionally draining on a family. The specialized expertise required to manage their welfare varies by state. It is wise to include special needs professionals on your team if these circumstances apply to you.
Special circumstances require specialized thinking and planning ahead, especially when mentally, emotionally, physically, and chemically challenged people are involved. An advisor’s role requires specific levels of knowledge and experience with specific disabilities. The right advisor for your particular situation understands the laws and strategies required to navigate through a complicated and exhausting process. Special needs loved ones require qualified legal representation.
Special Needs Families
Families with special needs require sufficient income to care for family members with physical, mental, and emotional disabilities while simultaneously ensuring the welfare of healthy family members. A detailed budget should be prepared outlining the expenses of caring for the special needs person that considers the cost of inflation over their lifetime.
Expenses include medical care; special education support; physical, occupational or speech therapies; and adaptation of the home environment to their unique needs. Your goal is to assist them with maintaining a high degree of independence and enjoying the life they deserve.
Government Benefits
A critical difference between traditional planning and special needs planning is access to government benefits. Government benefits for special needs people include access to residential and medical care facilities that may not be available through a private program, even if a client can afford to pay for them.
Special Needs Trusts (SNTs)
When you have unique or special needs to protect, trusts can play an important role.
A properly drafted Special Needs Trust can be created to provide for care and services not covered by government benefits. Generally, there are two types of SNT: First-Party Special Needs Trusts, and Third-Party Special Needs Trusts.
First-Party Trusts hold assets belonging to the special needs person. Examples of these assets include personal injury awards, divorce settlements, life insurance proceeds, retirement plans and inheritances.
Third-Party Trusts are trusts you create and fund with your own assets to helped a loved one with special needs. These can be current assets like investments or future assets like life insurance policies that will provide income after the caregivers are gone. These trusts may be funded with a variety of different assets, including life insurance.
A special needs attorney and an experienced insurance agent should be consulted to determine whom the owner and beneficiary should be and if the use of life insurance is appropriate for your specific circumstances.
Importance of trustees and successor trustees
Trustees and successor trustees are people you entrust your children to after you are gone. They can include trusted family members, friends, corporate fiduciaries, an attorney, a CPA, a bank or a trust company. Consult your advisors about providing high quality care while preserving the ability to use government assistance programs when parents are no longer around. Trust planning is a complicated process that requires the assistance of subject matter experts. And this type of planning will continue to evolve and change as laws change.
Titling of Assets Considerations
When both spouses are doctors who share the same patient, malpractice planning needs to be more focused. If that patient obtains a malpractice judgment against both doctors, it may impact the doctors’ planning and exposure to a creditor. If husband and wife physicians perform a procedure on the same patient and a malpractice proceeding results in a judgment against both of them, what assets can the creditors go after? A creditor can go after the individuals as well as the joint assets of that couple.
Titling of assets is a key component of asset protection planning. Depending upon your state, asset protection planning for dual spouse physicians can be different than for individual physician asset protection planning. Titling is crucial because a creditor can only go after the assets of the specific person they have a judgment against.
Special needs planning require an experienced lawyer and planner.
Divorce Planning Considerations
With divorce statistics hovering at about 50%, “until death do us part” is no longer a reliable commitment for planning. Marriages exist with “my” children, “your” children and “our” children. Planning can include prenuptials created before marriage and post nuptials, created after marriage.
A prenuptial agreement supersedes state marital law, if prepared properly. Attorneys recommend that each party be represented by his or her own attorney, enter voluntarily into the agreement, prepare and complete the agreement well in advance of the wedding, and not include unreasonable, frivolous, or forbidding terms that would allow one party to negate the agreement after the fact.
Life insurance can protect alimony and child support payments and/or equalize distributions in the event of an untimely death. For estate planning purposes, special estate tax breaks exist only for married couples. If your personal estate is greater than the allotted amount for estate taxes, work with your advisors to minimize your heirs’ taxable exposure.
If your income tax bracket drops substantially due to a divorce (because you are now filing separately), speak with your tax advisor about the pros and cons of converting any IRAs you have to a ROTH IRA.

 For more information contact Howard Wolkowitz, Financial Advisor, at or (954) 558-3673.

Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC. Member SIPC. [] OSJ: 2400 E Commercial Blvd., 11th Floor, Fort Lauderdale, FL 33308. (800)320-4180. CRN201909-218705
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