At Howard Bailey Financial, we understand that every financial journey is unique. Our team is dedicated to helping clients navigate a wide range of situations, from planning for a secure retirement to managing unexpected life transitions. The case studies presented here are based on real experiences, offering a glimpse into the challenges our clients have faced and the solutions we’ve developed together. To protect privacy, names and identifying details have been changed, but the stories remain authentic.
Securing a Lifetime of Care
Dan and Joanna, a couple in their early 60s, came to Howard Bailey Financial with a concern: how to provide financial security for their adult daughter, Emily, who had special needs. Emily, their only child, was in her 30s and had relied on their support her entire life due to significant medical expenses and her inability to work. Dan and Joanna wanted to ensure Emily’s financial security after their passing but faced a challenging dilemma. They worried that leaving Emily their modest estate of a few hundred thousand dollars could disqualify her from essential government benefits like Social Security and Medicaid. Without these programs, Emily would struggle to afford her medical care and basic living expenses.
The Challenge
Dan and Joanna weren’t wealthy, but the assets they worked hard to accumulate were critical to ensuring Emily’s care. They needed a plan that would allow Emily to benefit from their inheritance while safeguarding her eligibility for government assistance. They also had concerns about Emily’s ability to manage a large sum of money responsibly and feared it could be quickly depleted if not handled carefully.
The Solution
Their financial advisory team at Howard Bailey recommended establishing a special needs trust as the optimal solution for Dan and Joanna’s situation.
A special needs trust is a legal arrangement designed to provide additional financial support to a special needs individual without jeopardizing their eligibility for government assistance programs. Public assistance programs like Social Security and Medicaid have strict income and asset limits, but assets held in a properly structured special needs trust do not count toward these limits.
The trust would allow Dan and Joanna to leave their assets in a way that ensured Emily could continue to receive government benefits. Additionally, the trust’s spendthrift provisions would limit Emily’s direct access to the funds, ensuring the inheritance would be distributed thoughtfully over time for her benefit.
The Results
Dan and Joanna worked with our team to set up the special needs trust and carefully funded it with their assets. They named a trusted family member as the trustee to oversee the trust’s administration and ensure the funds were used for Emily’s needs, such as medical expenses, housing, and other supplemental support.
This solution helped give Dan and Joanna peace of mind. They no longer feared that Emily would face financial hardship after their passing. Instead, they were confident that she would be cared for in a way that preserved her dignity and ensured her long-term well-being. During a follow-up meeting, Dan and Joanna shared how much relief the trust had brought them. Knowing their daughter would still have access to government assistance while benefiting from the inheritance they left gave them the assurance they had done everything possible to protect her future.