Love to Last a Lifetime

Tips for creating a financially secure life for those with disabilities.

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By Stacey Freed • Photos by Krissy Blackband

Heidi and Nick Munholland adopted their daughter Gertie when she was three days old. The LaSalle, Colorado, couple knew before the adoption that she would be born with Down syndrome. “We adopted Gertie because my cousin had Downs, and she had touched our lives so much,” says Heidi.

Like many babies with Down syndrome, Gertie had a heart condition in which the hole between the heart ventricles would not close. She had surgeries when she was six and nine months old. While every parent worries about their children’s health, the Munhollands recognize, as Heidi says, that as “special needs parents,” there might be additional issues to deal with over the years as well as the possibility of their child passing away before they themselves do.

The Munhollands are not alone. According to a 2010 report from the U.S. Census Bureau, 19 percent of Americans have some type of disability.¹ Many need help managing their daily lives and are cared for by their families. There are government programs and financial vehicles that can help support medical and personal necessities for now and into the future. But how do caregivers decide among the available options? Working with an attorney and a financial professional is the best way to navigate the system to ensure that loved ones are taken care of.

Plan for everyone

Heidi and Nick had a financial strategy should something happen to one or the other of them, but they needed a plan to ensure continuous care for Gertie should something happen to both of them. They spent a decade on their own researching options, says Heidi, who works for a Thrivent office in Loveland, Colorado. They learned, for example, that there were income limits for Gertie to qualify for government aid. They knew that their state would fund therapists to come to their home. They heard about trusts, but they were worried that they could not afford to fund one. It wasn’t until 2017—when Heidi’s brother, Jeffrey Solomonson, became a financial professional with Thrivent—that the Munhollands became serious about setting up a plan. “My brother was able to help us out and connect us with everything,” Heidi says. He laid out the available options, which included first- and third-party special needs trusts and Achieving a Better Life Experience (ABLE) accounts. (See “Helpful Tools” section.)

The Munhollands eventually chose to set up a third-party special needs trust, which they were able to fund in part with their life insurance contract. “The trust is named as the beneficiary, not Gertie,” Heidi says. This way, the trust money won’t be included in Gertie’s assets, which must not exceed the $2,000 threshold of eligibility in order for her to qualify for the need-based government programs that can help her: Supplemental Security Income (SSI), a federal program that provides money for food and housing; and Medicaid, a state and federal program that pays medical expenses.

Jennifer Brownell, a Thrivent Financial professional in Appleton, Wisconsin, has a 12-year-old son with Down syndrome and autism. Brownell and her husband created an ABLE account and have worked with an attorney to create a third-party trust. This type of account was established by federal legislation in 2014 as policymakers were made aware of the significant costs incurred by those living with a disability. As mentioned, a person with a disability cannot have more than $2,000 in assets if they want to take advantage of government programs. The ABLE account allows up to $100,000 in post-tax dollars to be saved and not counted as an asset of a person with a disability.²

“If you don’t have these things in place, you worry about your kids.” Heidi says.

Understanding your options

Every person with a disability has a unique story. That person could be a child or an adult who has their own assets—for example, from working, saving or an inheritance. It might be more beneficial for that person to create a first-party special needs trust (which is funded by the person’s own money) as opposed to the third-party trust which is created by one party (a parent, perhaps) for the benefit of another (a child).

It’s important to work with a knowledgeable professional who can help you find a solution that best fits your situation. If, for example, a grandparent wants to leave money to a grandchild with a disability, “a good option is to not leave the money to the grandchild directly,” says Mark Kleindienst, a Thrivent Financial professional in Newfoundland, New Jersey, with a Chartered Special Needs Consultant (ChSNC) designation. “They should leave it to a third-party trust.” Otherwise, the money would be the grandchild’s asset and could push that grandchild over the income threshold and disqualify them for any government benefits.

 Aside from government funding, each state also has its own programs. “Most states’ Health and Human Services websites discuss medical assistance as well as resources for housing assistance and health care plans,” says Cheryl Krinke, a financial planning strategist and attorney at Thrivent. For example, her state has Minnesota Supplemental Aid (MSA), “which provides some cash assistance for basic needs. Someone eligible for MSA also may be eligible for the MSA Housing Assistance program.”

To best understand the trust options, parameters, fees and tax implications of your choices, you need a good team, Kleindienst says. “Find a lawyer and a financial professional to work together.”

The importance of self-care

Caregivers often face burnout as they navigate bureaucracy, daily life with an individual with a disability and their own lives. While creating a financial strategy can reduce stress, it’s important for caregivers to attend to their own personal and emotional needs. “Get out and take a walk, get a massage, visit a friend—just do something for yourself,” Brownell says.

“If you don’t have these things in place, you worry about your kids.”
—Heidi Munholland

Take advantage of community-based programs through county waiver programs that contract with local respite providers, such as Almost Family. That organization provides, among other things, respite care, or a person that is a trained care provider.

Both the Brownells and the Munhollands rely on support groups that offer time away for their children and activities for parents. Grandparents play a large role, too. Brownell notes how her parents became so involved that they are on the founding board of GiGi’s Playhouse, a Down syndrome achievement center in Madison, Wisconsin. “The most valuable guidance I’ve received,” says Brownell, “is from other parents on a similar journey.”

Spreading the Joy

Gertie Munholland may be just 11 years old, but she’s already doing her part to change the world. Last year, the fifth-grader talked to her school principal about giving Christmas gifts to children at her school who may not typically find gifts under the tree. Gertie started saving her money and created a nonprofit called the Fanimal Movement. (Her good friend, Houston Rockets player Kenneth Faried, is known as the “Manimal” so Gertie calls herself the “Fanimal.”) With the help of matching dollars from the stores where she shopped, Gertie was able to provide Christmas gifts to 12 children.

Recently, Gertie was featured on the cover of Down Syndrome World magazine. She was honored by the Global Down Syndrome Foundation for being influential in changing the world one smile at a time.

Helpful Tools

First-party special needs trust

  • Created using the assets of the person with disabilities (they must be under 65 years old).
  • The state paying the benefits is the primary beneficiary.
  • No limit to the amount of funds that can be gifted to the account.

Third-party special needs trust

  • Created with assets of relatives or friends.
  • The person with disabilities doesn’t own the trust’s assets and does not have direct access to the funds.
  • Anyone can be named a beneficiary after the person with disabilities dies.
  • No limit to the amount of funds that can be gifted to the account.

Achieving a Better Life Experience (ABLE) account

  • The person with disabilities must have acquired their disability before the age of 26.
  • Funds only may be used for qualified disability expenses.
  • Once the account’s value exceeds $100,000, Supplemental Security Income is suspended until the balance drops below $100,000.
  • Annual contributions are limited to $15,000 for the person with disabilities (as of 2019). However, a designated beneficiary may be able to contribute up to $12,140 more, if they have earned income and meet certain requirements.
  • Upon the death of a person with disabilities, any amount remaining in the account after Medicaid reimbursements goes to the deceased person’s estate or a beneficiary and could be subject to income taxes.
  • If they meet certain requirements, an individual who contributes to their own ABLE account may be able to claim a federal income tax credit.

We Are Here to Help

Do you have a loved one with disabilities? Talk with your Thrivent Financial professional.