complete book pdf 5.7.23

BENEFICIARIES & SPECIAL NEEDS PLANNING AVOID THE "SANDTRAPS" IN SPECIAL NEEDS PLANNING SO YOU CAN STAY ON "COURSE" There are two important things to take away regarding beneficiaries that applies to your special needs plan. First, that your beneficiaries on investment accounts and life insurance don’t change when you update your Will. Second, if you wish for your child with special needs to use money from these accounts for their benefit, it needs to be left to a third party special needs trust (discussed soon) The two most frequent mistakes that families make that throws their plans out the window is not funding their special needs trust,...or forgetting to change the beneficiaries on accounts that will fund the trust. 51

GUARDIAN OPTIONS There are more options than many families think there are when it comes to having a guardian for your child with special needs. Before looking at the options of having a guardian, think about what care is currently provided for your child. Write down on the left side of a page the support that is needed and provided presently. On the right side, write down all the things your child does independently. Starting here is the way I find works best. It keeps the focus always on your child’s quality of life and independence. From there, it’s just a matter of looking at your options and deciding which one suits your child’s individual needs. In 1 or 2 Sentences A guardian is the person who legally takes the role of the parent (generally if the parent dies or is unable to care for their child). The guardian is responsible for the same things the parent is (example – advocating for their access education), Do I Need to Do This? If your child with special needs is under age 18 or is over 18, but would be unable to live independently if you were to die,...you should have a guardian in place or one of the other options we're about to discuss that gives the support they need. The alternative options are to leave the greatest independence for your child while making sure they have support where it's needed. 52

Do I Need to Do This? Possibly. If your adult child is 18 and is able to be independent in some areas, but needs support in others, a limited guardianship can often provide all that's needed and nothing that isn't. Before taking this step, look at the less restrictive options to follow that may be a better fix. If they aren’t, this is likely your best approach. If you are in the role of legal guardian, limited guardian or other legal capacity (the options following this) don’t forget to have this be a part of your special needs plan. If you are a limited guardian, when you aren’t there a limited guardian will still be needed. This works best when you make sure that person understands what the needs are and how to best provide them. Your Letter of Intent does this well, so make sure they have a copy of it. You do not have to get a court to declare your child as incompetent. This is because they are competent in the areas outside where the guardianship is needed. They only need additional support in the parts of life that get listed. This by itself causes many parents to look to a limited guardianship rather than a full legal guardian. It is much easier to grant someone authority than it is to take that authority away. With that said, if your child needs support in all aspects of going through their day and supporting their basic needs, a full legal guardian is likely to be your best option. You will know this better than anyone else. You will also know if one of the other options discussed or combination of them is best too. LIMITED GUARDIAN In 1 or 2 Sentences A Limited Guardian is pretty much what it sounds like. A person is selected to be the guardian, but with a limited scope. They aren't the guardian for all things at all times.. This is common when someone has the ability to live independently in certain areas of life, but needs support for others. This is a good way to give your child as much independence as possible, without withholding support they need. 53

Do I Need to Do This? It’s not a need, but if they qualify it improves quality of life and independence. Before figuring out if they need it lets first make sure they qualify. i. They must have been under age 26 when they were determined to be disabled. Although you are not asked for proof when you set up the account, this information can be asked for at any time. ii. You can only have 1 ABLE account. The rest of the rules for the account relate to how the account is used. This will answer whether your child needs (or would benefit from) an ABLE account. You are not able to put more than $15,000/year into the account and you can only contribute money once per year. The $15,000 number does get adjusted for inflation and so it may be higher when you make the contribution. To receive the tax benefits of the money being able to be invested and be withdrawn tax-free, the money can only be used for a Qualified Disability Expense (QDE). An ABLE account can pay for many things. Since ABLE accounts are allowed by the state you’re in, they can make adjustments to the rules as they see fit. That is why it’s best to check with your state’s website that lists Qualified Disability Expenses (QDE). In general, health related items are covered. This is for any support in home, technology Medicaid doesn’t pay for and most other things under the medical & health “umbrella.” Also the things that allow someone’s life to run smooth are covered. This includes housing, transportation (includes modification of vehicles), education and support going to gaining and maintaining employment. There are many things covered not listed. The state can make some adjustments to what is covered and what companies can set up an ABLE account. This information will be on the state’s website. Important to know! If you use money from a 3rd party trust for housing expenses (mortgage, rent, utilities, taxes) the SSI recipients monthly benefit drops more than $200 in most cases. This does not happen if the money comes from an ABLE account. If this is a problem you’ve had in the past with SSI, an ABLE account will be an important part of your plan. Medicaid Payback - An ABLE account is owned by it’s beneficiary (the person with a disability). It can also be funded with money from a 3rd party special needs trust. You should keep in mind when making those contributions to put enough in to cover what’s needed, but the least amount above that. Why? ABLE accounts are treated in the way a 1st party special needs trust is after the death of it’s beneficiary. Medicaid can get paid back for any money spent throughout the beneficiaries life from the ABLE account. ABLE ACCOUNT (ACHIEVE A BETTER LIFE ACCOUNT) In 1 or 2 Sentences An investment account that the individual with a disability is able to personally manage and use without impacting their SSI payments or Medicaid. This is a great option when the person with a disability is able to handle financial transactions on their own. 54

In general, health related items are covered. This is for any support in home, technology Medicaid doesn’t pay for and most other things under the medical & health “umbrella.” Also the things that allow someone’s life to run smooth are covered. This includes housing, transportation (includes modification of vehicles), education and support going to gaining and maintaining employment. There are many things covered not listed. The state can make some adjustments to what is covered and what companies can set up an ABLE account. This information will be on the state’s website. Important to know! If you use money from a 3rd party trust for housing expenses (mortgage, rent, utilities, taxes) the SSI recipients monthly benefit drops more than $200 in most cases. This does not happen if the money comes from an ABLE account. If this is a problem you’ve had in the past with SSI, an ABLE account will be an important part of your plan. Medicaid Payback - An ABLE account is owned by it’s beneficiary (the person with a disability). It can also be funded with money from a 3rd party special needs trust. You should keep in mind when making those contributions to put enough in to cover what’s needed, but the least amount above that. Why? ABLE accounts are treated in the way a 1st party special needs trust is after the death of it’s beneficiary. Medicaid can get paid back for any money spent throughout the beneficiaries life from the ABLE account. State specific information on ABLE accounts https://www.investopedia.com/state-able-accounts-5217828 What you can and cannot buy with an ABLE account https://www.investopedia.com/able-account-eligible-expenses-5217840 ABLE ACCOUNT (ACHIEVE A BETTER LIFE ACCOUNT) 55 Everything that has to do with ABLE accounts, this is your best resource. Home - ABLE National Resource Center (ablenrc.org)

IN HOME CARE Another option that is able to provide only the support necessary is with in-home care. Although it may not be covered under Medicaid, this could be an important part of the special needs plan to make sure is funded and is put in place in advance. Very often, parents are so busy helping their child with special needs that they don’t realize how much help they provide. If you aren’t there, the same support needs to be met another way. If this sounds like you, start keeping track in one spot the different tasks you take care of. From there you can see if any of these tasks your child could do if something was changed (example – lowering countertops to an appropriate height for someone that uses a wheelchair). This could open the doors to find ways they can support themselves with your help in making the adjustments needed. For everything else, different forms of in-home care may fill in the gaps. Money is always a relevant consideration. For that reason, making modifications today often saves money compared to the higher price you'll pay in the future. Furthermore, if there are specific tasks that are expensive to hire someone to complete there may be someone within your child’s support group who can help. As with the trend throughout this special needs plan, many challenges have solutions. Those solutions are as unique as each family is. This is a reason additional options are laid out here, discussed and offered with creative ways to implement them. 56

This allows social security checks to be sent to the representative payee account. The money doesn’t get mixed in with the representative payees personal accounts. The money is still used for your child’s benefit. The main difference is that it’s sent to the payee’s account who will use the money solely for your child. This is a nice solution when the financial matters are limited to social security payments. Does your child handle the majority of things in their life, but you’re worried what would happen if their health changes? Then take a close look at the next option More information on being a Representative Payee https://www.investopedia.com/representative-payee-bank-account-5217784 JOINT BANK ACCOUNT Compared to a more restrictive guardian of an estate, a joint bank account allows your child to handle their financial matters while letting someone else make sure bills are getting paid and the account value stays below $2,000 (if required by the benefits they receive). This can also be an alternative to a power of attorney. Do you want someone to handle the checks that get sent (or electronically deposited) into your child’s account that come from social security? Then take a look at the Representative Payee option. REPRESENTATIVE PAYEE 57

HIPPA AUTHORIZATION RELEASE The Health Insurance Portability and Accountability Act (HIPAA) puts restrictions on when patient information can be released. Most doctors and specialists offices accept a “HIPAA Release Form” which states that you are allowed to receive health care information on a specific person. Ask the office you wish to obtain medical information from if they require the use of their own form or if they’ll accept a general HIPAA form. There is no way to tell without asking the office directly and it can save some hassle. I stress this a bit more as some doctor's offices don’t go out of their way to quickly process these requests. If the office doesn’t have a problem with other HIPAA forms you can obtain them with a simple Google search “HIPAA Form Template.” 58

SPECIAL NEEDS TRUSTS The Health Insurance Portability and Accountability Act (HIPAA) put restrictions on when patient in formation can be released. Most doctors and specialists offices accept a “HIPAA Release Form” which states that you are allowed to receive health care information on a specific person. Ask the office you wish to obtain medical information from if they require the use of their own form or if they’ll accept a Legal 51 general HIPAA form. There is no way to tell without asking the office directly and can save some hassle. I stress this a bit more as some doctors offices don’t go out of their way to quickly process these requests. If the office doesn’t have a problem with other HIPAA forms you can obtain them with a simple Google search “HIPAA Form Template.” What is it? Special needs trusts are legal documents that are used to protect the government benefits a person receives. The money or assets that go into the trust would otherwise go to the beneficiary and cause them to lose benefits such as supplemental security income (SSI) and Medicaid. As SSI and Medicaid are meant to provides someone’s “needs” they do little to give someone a greater quality of life. The money in the trust is meant to provide that quality of life. Additional information on what you can use the money in a special needs trust for https://www.investopedia.com/articles/personal-finance/071714/surprising-uses-trust-funds.asp Difference between a Will and a Trust https://www.investopedia.com/articles/personal-finance/051315/will-vs-trust-differencebetween-two.asp Trust Terms and overview of trusts (all types of trusts) https://www.investopedia.com/articles/pf/08/trust-basics.asp 59

Who Acts as Trustee? The trustee is someone you choose. This is usually someone that knows the person with special needs well and should be someone that is organized and has an understanding of finances. A trustee is able to get paid from the trust, but often leaves the money in the trust for the beneficiary. Another option for a trustee is a “corporate trustee.” This is where a bank or other large financial institution has a department specifically to handle trusts. They act as the trustee and handle all the trustees roles and responsibilities including distributing money for purchases. This is generally an option when a trust has over $250,000. Most financial institutions fee is a percentage of the assets in the trust between 1-2% annually or a minimum charge, whichever is more. This is usually at least $2,500/annually. A third option is a “professional trustee.” This is an attorney or accountant who charges a fee to fill the role of the trustee. It’s common for each option to meet most of the criteria you want, but not all. For example, a corporate trustee is going to be very reliable when it comes to managing the money in the trust and ensuring paperwork is always in order. However, they won’t have a close relationship or understanding of the beneficiaries wants and needs. A trustee that’s a friend or family member may know the needs of your child very well, but doesn’t have the time or knowledge to manage the money and keep paperwork organized. For reason it is possible to have 2 trustees at the same time (co-trustees). This can be the best of both worlds. There is someone to advocate for the beneficiaries wants and needs and a reliable group handling the rest. A word of warning, if you have co-trustees you can put in the trust whether both trustees must sign off on any transactions or just one. Having both sign off often makes the trustee role more difficult with little benefit. A trust protector is another solution if you want to avoid having multiple trustees. The Trustee A trustee is the person that executes the instructions of the trust. All the instructions can be summarized as follows “Use funds to enhance the beneficiaries life to the greatest extent possible.” Although abbreviated that is the spirit of the trust. The trustee has multiple responsibilities. 1. They purchase the things that are for the beneficiaries use and benefit. This is to keep the money out of the hands of the beneficiary (to protect their government benefits). 2. Manage (or have someone) the money in the trust so it lasts as long as possible. Trust Protector An alternative to having cotrustees is to have a “trust protector.” This person is given the authority to fire and hire a new trustee. You can have multiple people as trust protectors. In that case they would be known as a “trust advisory committee.” No trust protector can serve as the trustee. This is a good option to include in your trust. Trying to remove a trustee without a trust protector is not impossible, but close to it. You would have to have a judge remove the trustee and is generally only done if they did something illegal (ex. Stole money). Simply doing a horrible job isn’t enough. 09 SPECIAL NEEDS TRUST CHOICES 60 Free Trustee Handbook: Special Needs Alliance

3rd Party Special Needs Trust A third party special needs trust is funded with money that comes from anyone other than the person with special needs. Multiple people can contribute to the same 3rd party trust. These trusts most often are funded when the parents die. This is because the parents take care of expenses while alive doesn't require record keeping and other components of a trust. At the time of the person with special needs death, the money can be left to another beneficiary. Medicaid can not take this money, which they can when the money is in a 1st party SN trust or ABLE account. 1st Party Special Needs Trust When the trust is funded with the beneficiaries own money that would be done in a 1st party trust. A 1st party SNT is most commonly funded when a settlement is paid out as a lump sum. This allows the beneficiary to continue receiving government benefits and have the money used to benefit their quality of life. You can’t put a beneficiaries own money in a 3rd party trust and you wouldn’t want to put a 3rd parties money in a 1st party trust. This is because a 1st party SNT has a provision where any money or assets in the trust when the beneficiary dies first must be used to payback Medicaid before it can be left to anyone else. A 3rd p needs dies. Pooled Trust A pooled trust is good option when a trustee isn't available or there is a more modest amount of money someone has. This is because a pooled trust is run by a state approved non-profit who manages and keeps track of the money for many people and allows you to avoid trust fees, record keeping and having to find a reliable trustee. TYPES OF SPECIAL NEEDS TRUSTS 61 •When Should You Consider a Pooled Trust? | Special Needs Alliance •Using Pooled Trusts In Estate Planning | Special Needs Alliance •Special Needs Trusts and Personal Injury Settlements -SNA (specialneedsalliance.org)

FUNDING YOUR SPECIAL NEEDS TRUST FUNDING AFTER YOUR DEATH ALLOWS YOU TO ACCESS THE MONEY DURING YOUR LIFE AND AVOIDS POTENTIAL TAX AND RECORDKEEPING PROBLEMS 3rd party special needs trusts that parents set up for children normally are funded at the death of the parent. The biggest reason for this is the parents may need the money. Once the money is in the special needs trust it must be used for the benefit of their child. During the parents lifetime, they’re generally already taking care of the child's needs with money they can also use for anything else. In the financial section, I’ll share a great deal of insight on balancing the needs of the parents (retirement and their own long term care planning) and the goals for their child (fund the rest of their lives after the parents pass). More information on special needs trusts https://www.investopedia.com/terms/s/special-needs-trust.asp Special needs trust vs. ABLE account https://www.investopedia.com/special-needs-trust-vs-able-account5217834 62

CREATE YOUR TRUST NOW OR LATER? YOU CAN CREATE TRUST AS IT'S OWN "STAND ALONE" DOCUMENT OR HAVE IT WRITTEN IN YOUR WILL AND DIRECTS YOUR EXECUTOR TO CREATE THE TRUST AT YOUR DEATH Above we discussed the types of special needs trusts (1st party, 3rd party and pooled trusts). There are two different ways to actually create the trust itself. This likely seems more complex than it is. The primary way is simply creating the trust as it’s own stand alone document (trust document). This is where the document gets created that says all the information that needs to be known about the trust (who it’s for, who the trustee is etc). A second way to create a trust is to “write it into your Will.” This is mentioned when we discussed Wills. This option simply writes into your Will that upon your death a 3rd party special needs trust is to be created to receive the money and assets you wish to fund the trust with. If you are using an attorney to create the trust, this is a less expensive way to still make sure you have a special needs trust in place when it’s needed (upon your death). During your lifetime the trust does not need to be funded. If you create your trust online (which I’ll go through next) there are some benefits. If it simply isn’t an option to hire an attorney to create your trust, this is a much cheaper alternative. Websites that allow you to create legal documents have come a long way. If finding an attorney is something you know will get put off for months, years then you should set up your legal documents online. It’s also helpful to know that although a special needs trust is irrevocable, that occurs once it’s funded leaving the opportunity to fine tune a special needs trust with an attorney always open. The website asks you each question it needs the answer to in order to create the document. You then print the document off and make it legal by whatever rules your state requires. Often this is simply having 2 witnesses signing off that they watched you sign the document. It’s a good idea to have a notary observe the signatures even bn if it’s not required in your state. This simply makes it harder for someone to try to argue for anything other than what you wrote in your own Will. A couple drawbacks you’ll find in creating legal documents online. First, you can create a more personalized and specific to your needs document with an attorney. Second, for special needs planning purposes, I have yet to find a website that has the ability to create a testamentary trust (written into your Will). You can still create a special needs trust on it’s own though. 63

TWO OTHER TRUSTS TO KNOW Revocable Living Trust Medicaid Trust (Irrevocable) The name gives a lot away. This is a trust you can change, cancel, take things out and put them back in anytime. The trust is put in place where you act as the trustee during your lifetime. You have the trust own your property. Since you are the trustee you still have 100% control over your things. Upon your death, your property transfers to whoever you have as the beneficiary. In this discussion, it would likely be the 3rd party special needs trust. Just as it’s the same with money, you want to keep money out of the direct control and ownership of your loved one with a disability. A 3rd party trusts beneficiary is whoever you want. A 1st party trusts primary beneficiary is always Medicaid. You are only allowed to list the contingent beneficiary who receives what is left after Medicaid gets paid. Why Would I Do This? he sole purpose of having the revocable trust own the property rather than keeping it in your own name is to make the transfer of ownership quicker and most important less expensive. Anything including property that passes through your will to your beneficiary goes through probate. Probate is the process and steps of settling an estate. Settling an estate isn’t simply reading the will and handing your beneficiary the keys to the house. In most states there is a time frame you have to wait to give creditors who you owe money the ability to track you down,…there is time to allow for anyone who contests the Will. Many times this involves publishing this in a paper. This almost always involves an attorney which is what makes things get expensive quickly. The revocable trust (just like beneficiary designations) travels “outside the Will.” Meaning, your beneficiary gets the property transferred quickly, directly and for minimal cost. These trusts have a few names...Medicaid Asset Protection Trust (MAPT),…Irrevocable Medicaid Trust. This trust work differently and for a different purpose than the revocable trust we just discussed. The purpose of this trust is to make sure that your home goes to your children and not Medicaid. You transfer the home into the trust and after 5 years, Medicaid isn’t able to consider the home an asset of yours. For this reason, you can receive long term care from Medicaid after any other qualifications are met. Although the irrevocable trust is the owner (and often children act as trustees) you can still live in the house and have all the good (living in your home) and bad (paying taxes and cutting the lawn is still your responsibility). If someone knows they need long term care in the near future this is not worthwhile. Although each state is different, in my experience Medicaid going through your financial statements for the last 5 years is something to expect. They have employees that do this 40 hours a week and are very talented at learning where accounts are. This is something to consider if there is no reason you see needing a long term care facility right now, but want to protect your (likely) largest asset so your children can inherit it. This is something that I would not try to tackle on my own. Each states rules are very specific and you want to be certain you put in place a trust that does exactly what you want it to do. Estate planning attorney’s are well suited for this task. TRUSTS CAN BE USED AS A STAND IN FOR ACTIONS YOU'D NORMALLY TAKE ON YOUR OWN. 64

LIFE INSURANCE WITH LONG TERM CARE COVERAGE With long term care insurance no longer being a realistic option there are still ways to plan for long term care. I covered all the ways I’ve used with clients that work. Each persons situation is going to be differ ent so that’s why which documents to put in place is your choice. The primary concern I have for families is if either spouse needs long term care. At over $100,000/ year that can take the best plan and throw it in the garbage. To have Medicaid pay for those long term care expenses Medicaid requires you spend down your assets until you have (roughly) less than $15,000. What often helps is many states view retirement accounts as income, not an asset. Assets Medicaid makes sure you spend almost all your money on your care. They also require you put a portion of your income towards paying even when you have no assets left. This comes usually from social security and what’s called a required minimum distribution (RMD). In plain English, an RMD is a rule that when you turn 72 you are “required” to take out a “minimum distribution” from most retirement accounts. The reason for this rule is most money in retirement accounts has never been taxed and there is a lot of money in retirement accounts. The amount you have to take out is a percentage and starts around 3.5% and goes up a little each year until you’re taking out 10+%/annually. This is something you need to look into for your state and find out “how Medicaid views retirement accounts, as income or as an asset?” The answer you want is income. Here is one last reason why. If my client has $600,000 in a retirement account and $25,000 in his checking account, to qualify for Medicaid he would have to spend $10,000 of the $25,000 to get to $15,000. Now his assets are at the value they need to get down to. From there, he takes his RMD of about $23,000 that comes out of his retirement account and puts part of that towards his care and part of his social security towards his care. He is now in a long term care facility and still has about $570,000 in his retirement accounts. The last step is accomplished by the Medicaid trust that he put in place 7 years ago. This was done over 5 years ago so Medicaid doesn’t view this as an asset. He now still has this home worth $300,000,…his retirement accounts worth $570,000, a checking account worth $15,000 and a car worth $20,000 and still qualifies for Medicaid to pay for his long term care. Not bad. Now you know how to do what I would put in place for my clients for a lot less. You still should use an attorney for the Medicaid trust and talk to that attorney until you understand all the ins and outs in your state so you know how it works and that it does what you want it to. The attorney will be able to answer the question above about how Medicaid in your state is viewed as an asset or as income, but it's also available with a simple Google search. 65

LIFE INSURANCE WITH LONG TERM CARE COVERAGE Speak to an estate planning attorney you trust. There are things you are allowed to spend money on along with other strategies to protect most if not all of your money. And also ask them about any other legal documents you need. It’ll likely be less since they’re already helping you out. The attorney’s fees save you hundreds of thousands when you are able to protect an entire house and so it's money well spent. Very well spent. For anyone who wants to set up their documents online. You can use any website you choose. The step-by-step instructions below are through rocketlawyer.com. I receive nothing from them. I looked throughout the available options and found them to be the most user friendly. There are multiple ways to get help as you go through creating your documents. Another reason I went with this website is because their help functions, actually are helpful. 66

OPTION #1 CREATE LEGAL DOCUMENTS ONLINE (RIGHT NOW!) Even with being user friendly, it can still be a little intimidating putting documents together yourself on a legal website. This is why I’ve reviewed the available websites, have listed the sites that offer the forms you may need, are user-friendly, and the website already walks you through the questions to set up these documents. The websites already have multiple ways to get help if needed while answering the questions for the specific document you're working on. None the less, I went through and personally and wrote an explanation for every question I felt there is any reasonable opportunity to misunderstand the question. I put these in the order they appear on RocketLegal.com. I’m not receiving compensation of any kind from any of these websites. On Rocketlegal.com, with their “help” does a good job of telling you what the question is looking for and you can even see the document you are putting together at the bottom of the page. Additionally, you can update the sample document when you put an answer in which is a nice way too double check you’re doing things correctly. There are other sites that also do a good job. I’ve listed a few other options that can set up a special needs trusts along with the other documents you may need. If you are on the fence about this first option, I suggest to try to complete one of the forms you need first. You don’t pay until you’re done and choose to purchase it. That way you’ll find out if it’s a good option for you, and if it isn’t, you’ll be more knowledgeable when sitting with an attorney. 67

Multiple Ways to Get Help Once You Start A. Click on “? Need help with this question?” B. Click on “Help!” C. You can actually look at the document you are creating as you create it. This is very helpful as it lets you see the information you type in get applied to the same document you’ll print out. To see this just look at the bottom of the page. Click the link just above it to “update” the document with your answer. From here you can read that section and make sure it is what you want. D. Top right of screen: Read FAQ (or) send your question by email (or) Chat with an associate to get an answer right away (or) call their customer service number. E. If you can wait 1 day. You can fill out the “Ask a lawyer” section in the top right. The lawyer sends you an answer within a day. Make sure to include all details possible if you choose this. 1. Who is the grantor? This is the person giving the money to the person with special needs. Write full name, look at bottom of example draft. Is what you put correct? 2. Who is the special needs trust being made for? This is the person with special needs 3. How is the trust being funded? Whose money is it A. Beneficiary’s personal assets (This will make sure the trust is a “1st party SNT” B. Assets not belonging to someone other than the beneficiary (This will make sure the trust is a “3rd party SNT.” 4. Can the grantors (people that give the money) cancel or change the terms of the trust? You’ll want to answer “No” to not allow anyone to change or cancel the trust. By selecting “No” you are choosing to create an irrevocable SNT which is the type of trust that allows your loved one to continue to receive their government benefits. 5. What date will the special needs trust be signed? At the end you can save one document you started which would allow you to fill this in once you know for certain. You can also cross out the incorrect date, write the correct date and initial next to the change to acknowledge you know the change was made. 6. Who will carry out the terms of the trust? A – Sole Trustee B. Co-Trustees. (and list their names) Put another way, are you having 1 or 2 trustees. Refer to the Trustee section of your special needs finan cial plan for more information. ROCKLETLAWYER.COM SPECIAL NEEDS TRUST (3RD PARTY) 68

ROCKLETLAWYER.COM 7. Will the trustees serve with or without a bond? A bond works like insurance if a trustee steals money or spends the money on what they are not allowed to. This is not required and the majority of people do not get one because they are expensive. If wor rying about how reliable your trustee is, you’re picking the wrong trustee. I don’t suggest families when sitting in my office get a bond for the reasons I just stated. If you want to, absolutely go ahead if it gives you piece of mind. There is nothing wrong with having a little more piece of mind. Contact an attorney Legal 60 or your local court to find places you can get a bond set up. 8. (Questions about the Trustee) If you want 2 trustees at the same time. Fill in yes to having a co-trustee. That will let you put their name in. If you want (also want) a trustee listed incase the first trustee(s) die, then list a successor trustee(s). 9. Will the Trustee be entitled to compensation? This money would come from the trust and usually is a most amount agreed upon by both parties. No one will get rich off this money. It will compensate them for their time. Some trustees get paid, some choose not to. 10. Will the trustee be entitled to reimbursement to expenses related to the trust? I would say to put “yes.” They don’t have to take the reimbursement. It’s an option. If they are already taking care of the not easy task of running the trust, you should at least make them whole on money they spend. This could be for hiring an accountant to complete the taxes for the trust, paper copies etc. Have the discussion with your trustee 11. How often should the trustee provide a written accounting to the person with special needs or you? Usually semi-annually or annually works for most families. Anything else adds a significant amount of work to an already time consuming task. 12. Will the trustee have sole or absolute discretion to make payments to or for ___? NEVER have the trust be allowed to give money directly to the person with special needs. The purpose of the trust is so your loved one benefits from the money, but doesn’t have it. I’ll go over ways to make handling this easy for you, for your loved one and so your accountant will love you … 13. How may the trustee make payments (buy things)? Again, Do Not check “directly to beneficiary.” Although many people list “only the trustee should pay for the beneficiaries care,” If there is a guardian,conservator,important friend or family member go ahead and list them. This does not give them the right to take money out on their own, it only allows for the trustee to pay back someone that spent money on the beneficiary or the money will be used directly for the beneficiaries benefit. 14. Before using net income of the Trust, first consider - This question sounds more confusing than it is. You already will make sure use of the trust will not dis qualify the beneficiary from receiving any government benefits. For this reason, answer “Yes.” 69

ROCKLETLAWYER.COM 15. “Should the Trustee try to maxim...” Same thing here. Who would choose “no” to trying to maximize government benefits. The purpose of the trust is to be able to do this. So answer “Yes.” 16. “Is the trustee allowed to make distributions for food, or food, shelter or health care that could affect ___ government benefits? The only answer is “No.” The trust is to protect government benefits. The Trust can never spend money on those 3 things without causing a problem with protecting your loved one’s government benefits. 17. “Under what circumstance is the Trustee allowed” Same thing here, the answer to select is “If it is in ___ best interest to suffer any losses of government benefits. Fairly rare situation. 18. “What kind of living expenditures will the Trustee have discretion to make for ____?” This question could be worded better. Do not select anything that does the same thing (or practically the same) one of the government benefits being receives pays for. Example – If you receive HUD-8/ Section 8 housing assistance, then do not check “rent” Most of the other options won’t impact other government benefits 19. What “leisure expenses”. This is completely up to you. There are no issues to worry about here. Certain purchases are not allowed, just not ones listed here. 20.What kind of health expenditures? Select the options that they do not impact government benefits, you can also select burial expenses too. 21. “Do the decisions made by the co-trustee need to be unanimous?” Saying “Unanimous” will require both trustees to sign off on anything that otherwise could be signed off on by one person. This will be a burden. If you have a concern about someone handling the finances that you shouldn’t choose to have that person help with other parts of the trust. 22. “Will the trustee be released from liability...” Check “Yes.” They key is “in good faith.” This means the trustee is not liable (can be sued) for a mistake they made that without any negative or selfish intent. 23. “If the trustee chooses to resign...” Requiring this to be done in court is generally not needed. 70

ROCKLETLAWYER.COM 24. “How would you like to include the list of assets” This is only for things immediately going into the trust. A separate list usually is easiest. Make sure to keep that list with the trust document (the document you are putting together right now) and sign and date next to each asset. 25. “Can assets be added to the trust with” Put “yes.” Do you want to have the option for a relative to add money to this or put extra money in the trust, of course. 26.“Who can add assets?” Select “Anyone” 27. “Can assets be added without trustee approval?” “No.” The trustee needs to be aware of what money or other assets are in the trust. Example – If someone puts a home in the trust that owes $100,000 in unpaid taxes, that is something we would want the option to stop before it happens. 28. “Who can add assets to the principal of the trust without trustee approval?” Select “Creator of the trust only.” 29. “Is anyone obligated to add assets..” Regardless of the situation, put “No.” When planning we want to leave as much flexibility as we reasonably can. 30.“When will the trust terminate?” If you choose “upon the death of the beneficiary” all money will be available to the beneficiary(s) when you die. There is nothing wrong with this, it’s a matter of personal preference. If you write rules specific to when people receive money, then put “When the trust funds have been spent.” Most choose “upon the death of the beneficiary.” 31. “Who will receive any remaining funds upon the death of the beneficiary?” You can list however many people you want here. These are the beneficiaries. If you list more than one person write next to each person the % you want them to receive. 32.Will you have this document notarized?” I highly suggest doing this. Usually a bank will have a few people that are notaries. They can charge you a small out (less than $50), but most of the time they won’t charge you (especially if you use that bank). Having the document notarized avoids banks or financial firms not accepting the document, along with avoiding potential arguments over what was originally in the trust document. I also suggest anyone that signs initials the bottom of each page. Not required anywhere, just something I think is a good idea 33. Make sure to list at least two witnesses. If you don’t know who they are, put TBD then fill them in when you know and initial next to where you cross out “TBD.” Problem solved. 71

1. Whose will is this Put your name and city and state you live in 2. Are you married? 3. What’s your spouse’s name? 4. Will you leave anything to your spouse in your will? 5. Do you want to specify who died first, if you and your spouse die at the same time? The purpose of this question is this, if you were to die first, your things would go to your spouse. Since she died in the same accident, your things would then pass to whoever her beneficiary is after you. 6. In case of simultaneous death, who died first? There is no right or wrong answer here. It’s your preference. 7. Do you have children, or would you like to provide for future children? Children includes natural and adopted, does not include stepchild (unadopted) If you want to include step-children you can. You just need to specify this. 8. Are any children intentionally excluded as beneficiaries of the will. If the answer is “yes” make sure to mark this here. The excluded person trying to go after what’s in the Will (They can go after it, it’s just very unlikely they’ll get anywhere) 9. If a beneficiary dies less than 30 days after you, would you like to pass that share of your Will to someone else? 10. Do you want to make any bequests? This question is more important that many think. Take time to reflect on what things mean a lot to specific people. Example – Emerald necklace that was worn by great-grandma, the fancy silverware, the classic car, the antique gun, the Gibson guitar, the grey rag doll with the eye handing out, the family photos and so on. Make as many bequests as you’d like. If you need to go on a separate page do so, just also get that page signed by the two witnesses and notarized. Good Advice - Also, consider the option of gifting these things while you are still alive. This way you get to see the enjoyment that item brings to someone you love. 11. Do you want to include digital assets in your residual estate? Residual estate = All the thing tangible you haven’t named in a specific bequest that get split up by percentages. 12. Who will receive the residual estate? *Remember equal inheritance vs. fair inheritance ROCKLETLAWYER.COM LAST WILL & TESTAMENT 72

13. Who will receive the residuary estate if Person 2 dies before you? In other words, who do you want to have as a secondary “contingent” beneficiary. 14. Who will receive the residuary estate if your children and grandchildren die before you? 15. Do you want to name a Guardian for your minor children? 16. Do you want to name a sole-guardian or co-guardian? 17. Do you want to name a caretaker for your pet(s)? 18. Do you want to leave a pet fund to the caretaker for the care of your pet? 19. Would you like to include any last wishes? This is an open ended section you can put whatever you’d like but, if you want to direct someone to halt giving any further medical care that requires a living will. People often use this section to state what they want done with their remains, services to hold etc. 20.Would you like to allow ____ to receive compensation for serving as your executor? 21. Will the executor be allowed to limit court involvement in the settlement of your estate? This only applies to some states that allow the courts to be “hands off” overseeing the estate if it’s below a certain value. 22.Should the executor be released from personal liability resulting from the performance of his/her duties? This only applies in situations where the person acted in “good faith” meaning they weren’t trying to do something unethical or illegal for a benefit, they just simply made a mistake. 23.Will any disputes between beneficiaries be settled by the executor? 24.Who do you want to manage your digital assets? This is an executor of your estate, but only for digital things Would you like to allow for compensation for the digital executor for handling your digital estate? 25.Who is the first witness (to the signing of the will)? 26.Who is the second witness? 27. Would you like to include a self-proving affidavit? This document does not “prove” the Will is valid, but if the Will needs to be reviewed by the probate court, and neither witness can be found, it will speed up the process of settling your estate (aka distributing everything to everyone it should go to). 28.In what county (not country) will this Will be signed? You are generally not required to file a copy of your will with the county you sign it in, but it’s a good idea to. ROCKLETLAWYER.COM 73

1. Name / DOB / Address 2. What kind of health care directives do you want? Directives about end-of-life; Designation of person to make health care decisions; both 3. If you have a Terminal condition, do you want life sustaining procedures withheld or withdrawn? 4. Do you want artificially provided foods and fluids, even if there is no hope for recovery? 5. Do you want artificially provided foods and fluids, even if you are terminally ill or permanently un conscious? 6. If terminally ill or permanently unconscious, do you want to receive treatment for relief of pain even if it accelerates your death? 7. Do you wish to include a pregnancy provision 8. Which organs or tissues do you want to donate at your death, if any? 9. Specify the purpose of the donation? 10. Who do you want to designate to make health care decisions for you? 11. Can ____direct the withdrawal of artificially provided food or fluids? 12. Describe any limitations you want to place on _____’s authority. 13. How long with this document be in effect LIVING WILL / ADVANCED DIRECTIVE 74

Can I use the attorney that made my Will or did the closing when we bought our house? No. Unless the attorney that created your Will is also an estate planning attorney you should not use them. They need to have estate planning and working with trusts makeup at least a third of their business so keep up on legislative changes and not have to "learn on the fly." Can I get a referral from my friend that knows a lot of attorney's? Yes and No. I encourage you to ask your friend for the names of special needs and estate planning attorney's. No other attorney should be used even if you are referred to them. Also, get prices from more than one attorney. Just because you were referred by a friend does not mean it will be less expensive for you. And instead of taking the person charging you the money's word for it,...get a second or third quote. So where can I find a competent attorney? Search on www.avvo.com. Just like with every other website, they are paying me $0.00. In my years as a financial planner I've found this to be easiest and often needed to refer clients to attorney's and this made that a lot easier. On the first page you put what type of attorney you need and the city, state you're in. Search for "trusts" or "estate planning." The legal side of special needs planning is estate planning and working with trusts. From the list that comes up you can further narrow the list down to only include attorneys that offer a free consultation and by review. When looking at the attorney's review it is not enough to see if they are rated 5 out of 5. See how many reviews/ratings they received. An attorney with one review that is a 5 out of 5 does not make me comfortable compared to an attorney with 15-20 reviews and is a 4.8. If the attorney has 10+ reviews on Avvo they likely get business from the site and therefor, care about their rating,...and the rating you give them. USING AN ATTORNEY 75

How much will everything cost? It depends. Ok, I know that is not a helpful answer. There is a wide range of prices attorney's can charge. Here are important factors to know so that the amount you pay is reasonable. You probably don't want the cheapest attorney and you definitely don't want the most expensive. As a reference point, for a special needs trust only, I've seen costs between attorney's from $3,000 up to $26,000. For tasks like trust documents attorneys usually charge a flat fee. This is because it's easy for them to know how long it will take them to create the documents and meet with you. I highly suggest getting quotes for all the documents you need from 3 attorney's. If you are busy, schedule a Zoom call with the attorney. They will probably like it because it's generally faster. The amount you'll save will probably be a couple thousand dollars and will take 2 hours or less,...that's a good hourly wage for this "job" I'm suggesting you take. If you live in Manhattan it's normal to pay $1,000/hour for an attorney. If most other cities you'll be charged between $250-$500/hour. Let me be the most honest and transparent professional you've ever met. As a financial advisor I ran into the same situations attorney's run into. Some clients you spend a lot of time helping and you get paid nothing and other clients that I'd manage $3,000,000 and even giving them a fee lower than any other advisor would give them (.5%) I still made $15,000/year and all they wanted was to meet once a year for an hour and I would spend 2-3 hours preparing. The same is for attorney's If you have only a Will done you'll be charged somewhere between $500-$1,500. If the attorney meets with you initially, creates the document in a couple hours and gets your old Will from the county to destroy it and meets with you once it's done to review which are all typical things your attorney should do,....they may make less that $100/hour. Don't get me wrong, $100/hour is not bad money (it works out to $200,000 a year for a 40 hour work week), but attorneys (and financial advisors) have to also pay for their assistants, paralegals, office space, printers, ink, programs only professionals use that are usually $400/month (LexisNexis and WestLaw for attorneys). I share all this information for two reasons. One to give you context and know the range of numbers I give you will fluctuate and why. Two, because no one else will tell you who is trying to charge you to do work this information. What I want you to take away from all of this is simply to get 3 quotes because you'll probably see at least a $5,000 different if you have them put together 2 Wills, POA, HCP and a Special Needs Trust. If you only need a Will, POA and HCP a normal range is $500-$1,000/per person and for a couple a little cheaper than double the price for one person and should include a POA and HCP. If you add a trust and guardianship paperwork you should still be under $10,000. The importance of the piece of paper doesn't change how long it takes to create it. USING AN ATTORNEY 76

Very Helpful Questions to know to ask These are questions to make sure you don't overpay and you're working with someone qualified. How many hours do you think it will take you to create all my documents? Ask this if you are getting all very high quotes. Why? because some attorneys throw out high numbers because 1. They truly don't need the business and don't care if you say yes or no. 2. Most people will only go to one attorney and whatever the attorney says they assume is what all attorneys will say. Your attorney is not freewriting starting with a blank page your documents. They have templates they modify so the document is specific to your needs. Now, picture your attorney alone in his or her office and working only on your documents and having a template to start with. How long do you think it should take a professional that been doing this for years? There is not perfect answer, but if the attorney had no other work (because you're not being charged for him to do anything else) lets say it takes him two full 8 hour days (which I think would be a concern if it actually takes them this long). So 16 hours x $500/hour = $8,000. Let's add a generous $2,000 for his overhead expenses and you're at $10,000. This means he has 14 hours to make a few documents he has made a hundred times before and meet with you twice for 2 hours. I give you this example and this number so if you get a quote for over $10,000 no matter how many documents you need, I would be suspicious. I have a child with special needs and have been told I need a revocable special needs trust to leave money in when I die. Does that sound right to you? This question is to see if the attorney knows at least basic information on special needs plans. Why this question? Because a special needs trust (or supplemental needs trust) are irrevocable. If they make the trust revocable you just spent thousands for worthless used paper. I've seen this done when a client (ignored my suggestion) and used "the guy who made my Will." He was charged $9,000 for only a special needs trust and it wasn't even written correctly. You can also ask "When the trust is funded can we have $5,000 go into a joint bank account with their (fill in name of family member) who will keep an eye on their spending? This would just be for small expenses here and there. Why this question? Because your child can't have over $2,000 of assets in their name. If they do they will be penalized or lose SSI and possibly other benefits as well. Even if you consider it's a joint account, half of the total is still $2,500 and this will also show the attorney knows that it doesn't matter someone else is on the account. These are things that anyone working consistently will know off the top of their head and stand out. They are not difficult questions where I'm trying to pick someone apart. If they don't get these two questions right, I would move on. Even if they knew the correct answer, they were half listening when they gave their first incorrect answer. USING AN ATTORNEY 77

You should know what you want the documents to accomplish so the attorney will tell you if you need something different. Names and contact information for everyone that will be in any document (example - trustee, trust protector, contingent beneficiary). If you don't know who you will choose for a role, get the documents done that you can and get the other document later. Don't put everything off for this reason. Detailed information on your child with special needs. What they will need in the future, where they are most likely to live and so on. One reason attorneys are paid well is that it's their responsibility to hear all that information through a legal lens. Something may not seem significant to you, but the laws surrounding trusts, it may be a very big deal. It's their job to notice, it's your job to give them all the information. Any current legal documents you have. They will know if you need to replace them or not and they will tell you what to destroy and what to keep. When you use an attorney the nice thing is it's there job to take care of pretty much everything. Have questions prepared. I see an overlooked opportunity if you do not ask the attorney every question you have about special needs planning or any other legal topic you have been trying to find the answer for. They are getting paid well and the most difficult question for you is likely something they know off the top of their head. Clear out the noise of what well meaning friends and family tell you and hear it from a professional. Same goes with your financial advisor. 100% of the time a client started a question with "Now, it's ok if you don't know this but,..." it was a question that I knew the answer immediately or it would take 2 minutes to look into with the programs and research I had access to. One more thing! What should I have prepared for the attorney? USING AN ATTORNEY 78

How to know you’ve completed this part of your overall plan? You know what documents you have that are up to date and what documents need to be created » Will (for each person)___ » Health Care Proxy (HCP) ___ » Power of Attorney (POA)___ » Guardianship ___ » Alternative to Guardianship ___ » Special Needs Trust (1st party)___ » Special Needs Trust (3rd party)___ » Pooled Special needs Trust___ You’ve either found an attorney you’ve agreed to work with and they have all information they need to create your documents (this is often done by completing an intake form they provide) Or You’ve created your own legal documents online, printed them and completed what your state re quires for the documents to be legal You’ve communicated to everyone that you’ve elected to fill a roll (ex. Power of attorney) and they’ve agreed to that rol END OF LEGAL SECTION 79

Look at where you stand today learn what changes make a difference Retirement & long term care special need plan Take action have an hour review & update each year Financial Section How to: Put myOxygen Mask on First Learn How to Fund and Protectit Make Your Changes Plan YourIncome Simplify Investments 80

FINANCIAL THERE ARE ENOUGH OXYGEN MASKS FOR YOU AND YOUR LOVED ONE In this section, I'm going to breakdown your assets, income and show you how much you need at a minimum and if you have a surplus, what the true number actually is. From here, I'll show you how to simplify your investments, be more tax efficient and where 1.6 million dollars is hiding that can go towards your retirement. The key is to think beyond simply saving more, but instead to create more income in retirement. This will leave more money for you and give you more options to fund your child's special needs plan. 81

ARE THINGS FINANCIALLY IMPROVING OR STAYING THE SAME? Think of roughly what is in your bank accounts (checking, savings) today. Now, is that about the same as you had about a year ago? See how easy it can be to boil the complex down to it's core. This gives you a good idea of the direction you’re going (forward, reverse, or neutral). The information is not good or bad. It lets you know where things stand at the moment. Knowing you have less money, or more debt doesn’t get to the point that’s most important. Do you have less money or more debt because of a onetime expense (car accident, roof needed repairing) or simply by spending more than what you make. If it’s because of a onetime expense, it’s true if not a car repair then next year it may be tires for the same car. Although there can always be another one time expense, here we have the opportunity to save. We now know where to put out focus. “What’s the way to make saving (something everyone wants to do and few do successfully) easiest?” Much advice is given to where to invest savings before anything has been saved. You’ll get farther by finding the easiest way for you to save. There will always be places to invest money, but setting up the way to save the money first will actually be helpful. The other situation is where we didn’t get hit with a large onetime expense. This simply means we are spending more than we are making. This requires answering a different question. “How much do we need?” and “How much more than what we need are we spending on anything else?” This lets us know first “Do we have enough coming in to pay the bills?” If we do, then regardless of where the extra money goes, “how much extra are we working with?” WHERE AM I FINANCIALLY RIGHT NOW? There is no shortage of people offering their point of view on this topic. The next pages goal is to take a very open-ended topic and boil it down to a few simple questions that special needs families can easily answer. Special needs families more than any others appreciate how difficult it is to find free time for any task. Each sentence here has the goal of explaining the most important information, in the most understandable way, and to share the best way to use that information to improve your life and the life of your loved one with special needs. The better grasp of your own financial life you have, the better you’ll be able to create the greatest quality of life and level of independence for your loved one. It’s been said that anyone can make a topic sound complicated, but it takes true understanding to take the complex and make it simple. That is the gift I aim to give you and those you love. First, we’ll look at the easiest and most accurate way to get to the core of whether we are improving or in fact standing idle. 82

DONT FORGET YOUR RETIREMENT ACCOUNT If you’re contributing to any retirement account (401(k), 403(b), 457, IRA) give yourself credit for that. If you are, then you’re doing something that is difficult for many to do. That being, in the chaos of today, to realize tomorrow is likely to come, and to set yourself up to have tomorrow be easier. If you contributed to your retirement account, but your checking and savings stayed the same (or shrank) pause to see what that means. That is the answer to finding the easiest way to save money. The answer is to make it automatic. The contributions to your retirement account happen automatically. What if you had to write a check once a week in order to contribute to a retirement account? Although it’s easy to say there is no way I can save anything. It’s likely not as definitive of a truth as it seems. If you have a retirement account and you’re saving 3% and you increase it to 4%, even if things are tight, that is unlikely to rock the boat significantly, let alone tip the boat over. Another piece of information is you likely contributed to your retirement account in small doses rather than writing a check at the end of the year for the whole amount. Whether it be weekly, biweekly or monthly it’s easier if saving is automated and also when it’s done in the least painful way available. Good Advice – Do you have a retirement account with an old employer. If so, it’s probably still there. If it had less than $5,000 in it you should call that investment company because your employer is allowed to (doesn’t have to) send you a check for the amount in the account (even if you don’t request it). Good Advice - If you have questions on your retirement plan, call the investment company where the retirement plan is held first. They will give you specific answers and help. Your H.R. department doesn’t have as much information and will simply refer you to them anyway. 83

EASIEST ACCURATE: HOW MUCH IS SPENT ON THINGS THAT AREN'T BILLS? We have a pretty good idea of whether things are improving financially or more so staying the same. To take the next steps we need to know how much we need. Put another way, we need to find out on the first of the month, how much do need to cover the bills we already know we’re going to have to pay? If I ask you to do any task, know it’s made to get just the information we need with the least effort used. That is the case here. We need to know accurately how much we need. To do that, pull up your account online for the account you pay your bills from. If this is more than one account, pull both up. If you don’t have an account online, please make one. This information is important to know off the top of your head going forward. If you don’t know how much you need, you don’t know if you can save anything. If you know what you need, then you know what you have that’s extra. Go through the “transaction summary” for the last 3 months. Write down every bill that you have. Include money spent on gasoline and groceries. You don’t have to do anything more specific than add all of them up. Now, write down any bills that aren’t monthly that you didn’t include. For example, if you pay for an Amazon membership once a year, divide that number by 4 to get how much 3 months of Amazon costs. Add those 3 month amounts to the other bills. By bill, I mean something you know you will have to pay for ahead of time. Now take that total number and divide it by 3. 3 months of bills, divided by 3 = How much you need every month at a minimum. If you are stuck figuring out 1 or 2 bills. Put an honest estimate down and move on. It’s most important to get an accurate picture than to not finish because you’re trying to get a perfect picture. Accurate is preferred over perfect. Getting stuck on anything runs the risk of stopping there, blinking and having 5 years go by 84

WHAT DO YOU NEED MONTHLY? This number is how much you need every month (at a minimum). Whether it’s for savings purposes or deciding if you tell your boss off and quit abruptly it’s important to always know this number. Now, do the same task again except add up everything that you did not count as a bill. It doesn’t matter if it’s a one time expense (new tires) or more frequent (coffee). You don’t need to worry about what the money is spent on, only that it gets spent. Add all the spending that is not a bill for 3 months. Now divide that number by 3. That is how much on average you spend on "stuff." This tells you how much extra you are working with. I am not going to tell you to save every penny and don't have a life. What I am going to say is to know these numbers and make decisions with these numbers in mind. 85

WHAT DO YOU NEED MONTHLY? This number you just figured out is how much extra you need to maintain your quality of life. Simply knowing what these two numbers are will help you more than can be explained. Most people are unable to account for at least 20% of what they earn. For someone that earns $50,000 a year ($25/hour full time) that’s $10,000/year that goes,...somewhere. There are a lot of calculators online to tell you how much you need to save to have $ X amount of money. We have and will continue to hit on the key financial areas. Where to shift money will answer itself. There are always places to spend money and after we go through all traditional and out of the box planning strategies, I’ll guide you towards what places are best for you. It’s simply not a question that I think a calculator can answer, at least accurately. Here are some miscellaneous things to look at or consider regarding spending and bills * How much do you spend on monthly fees on Apps? This should be on your phone bill or simply google “how to find out how much I spend on monthly subscriptions on apps.” Do you have insurance on your phone? Each year these policies get more expensive in subtle ways. When I reviewed phone insurance plans before writing this I found them not to be worth the cost. Why? First, the monthly amount starts off already high. Second, you have to pay a “deductible” depending on what is wrong with the phone. If it breaks it’s one amount. If only the glass breaks it’s another. This makes it even more expensive. Third, carriers take advantage of what is true for all technology. Technology loses value incredibly fast. The phone that is $1,000 today can be bought brand new in a sealed box on eBay a year later for $500. This acts as phone insurance simply by the price falls. In the end, you aren’t insured for anything. The phone they replace, you can buy for the same price or cheaper unless you break the phone the day you buy it. Do you pay for things that were worth it and no longer are? Is your cable bill $100 and you mainly watch Netflix for $15? Do you have a cell phone bill that is $120 and there are new carriers out that use the same cell phone towers and are $15-$30/month? These two changes by themselves will save you $2,000. That is time well spent to make the change. When you went through your bills did you see charges that you didn’t recognize what they were for or was for something you didn’t know you were signed up for. Call those companies tomorrow and cancel them unless you want to start using those services 86

HOW DO I LOOK FOR RETIREMENT? An Inaccurate Way to Look at Retirement If you use calculators that are offered on companies retirement plan websites or that you find on Google they generally oversimplify things. You plug in what you have now and your age, when you plan to retire and the calculator does the rest. Usually what gets spit out is that you need to save an unattainable amount every month if you ever want to retire. This doesn’t give anyone a better perspective or help in any meaningful way. Financial professionals have access to expensive software that allows them to adjust every detail imaginable. Do you want to plug in an 11% pre-tax rate of return for the $78,000 you have invested in large cap growth funds? You can do that and more. Even after all adjustments you want are entered, you generally get a chart with a line going from the bottom left on an X Y axis to the top right. This shows whatever you spend today will only go up because the cost of living (how much a gallon of milk, or gasoline etc increases) goes up on average 3% or more annually. If you need $100,000 day 1 of retirement, you’re going to be spending $250,000 when you’re 90 years old. Programs professionals use allow you to be very precise, but inaccurate. This doesn’t mean do nothing. We can get a much more accurate view by using information that almost any financial professional or non-professional will agree on that isn’t accounted for in either approach just discussed. 87

STAGE 1 - THE GO-GO YEARS (Year 1-10 of retirement) The first 10 years are going to be the healthiest years someone has in their retirement. Tough to disagree with, yes? Still simple? When someone goes from a 2 day weekend to a 7 day weekend they fill the 5 extra days they worked and made money with things that cost money. This leads people to spend 100% or more in the first years of retirement compared to what they made pre-retirement. The trips that were put on hold, the RV that didn’t get purchased, the update to the house you’re spending more time in, the road trip, whatever it is, in the healthiest years people generally do things that cost money. This goes against the traditional advice that says to take 4-5% out of your retirement account. Knowing how much 4-5% of your account adds up to is helpful, but knowing if and when to go above is information that can be used. So although things will cost more in the future, people rightfully so want to do the things they want to do, when they are health and able to. I agree with this approach. I’ve also seen families that diligently saved their entire working lives. They retired with enough money to (within reason) do whatever they wanted for as long as they wanted. 3 years into retirement, one of the spouses died. Once that happened, the money lost it’s value. Money is worth what it is able to do for you. I don’t recommend to spend without thinking and don’t recommend to spend recklessly “because I might be gone tomorrow.” That is far from my view. It doesn’t make sense to save every penny while you are working and not know how to spend it safely in retirement. What is best is to know when you can spend a bit more and when to plan to spend a bit less. If you take those trips and buy those RVs by taking out 7%...8%...9% out of your retirement, know when you will slow down and that you will. This often happens naturally in the second stage. SIMPLE & ACCURATE WAY TO LOOK AT RETIREMENT Many articles say that you’ll need 70% of your income (you made before retiring) in retirement. This isn’t what I have actually seen when watching hundreds of families go through retirement. Although every family is different, by and large I saw people go through 3 stages from the start of retirement to the end of retirement. The 3 stages is what I’ve also found a lot of agreement on. Looking at retirement this way is simple, and accurate. Now let's look at the same thing with a fresh set of eyes. 88

STAGE 2 - THE REFLECTIVE YEARS (Years 11-20 of Retirement) After 5-10 Go-Go years the families I’ve worked with that have taken the trips they wanted, bought the things they put off and replaced the countertops they wanted replaced. These families were still overall healthy. They may not go for a 5 mile jog each morning, but they could go to the places they wanted to go. Despite this, the things they chose to do cost less money. They spent more time together, more time with family, more time baby sitting their grandkids, more time doing things that cost a lot less. It’s important to point out, this is the family choosing to do what they want. They didn’t slow down because they had to (although it was a good idea they did). They slowed down by choice. This is how you know you hit a bullseye with your financial planning. You are doing the things you want when you want and it fits well with the money you have. Where a traditional retirement projection will show the person that made $100,000 when they retired needing $150,000 in the middle of retirement, usually this isn’t the case. This is usually the time they’re spending 70% of what they made. Gas, milk and property taxes are higher, but you're spending significantly less on leisure time. This is something that is tough (maybe impossible) to build into financial planning software. In the last stage spending levels off or jumps up. Both options your plan addresses. 89

STAGE 3 - THE NO-GO YEARS (Years 21-? of retirement) This stage is called the No-Go years because to no one’s surprise, when you’re in your late 80’s you’re not as agile as when you were in your 60’s. There are more doctors appointments and appointments with specialists. Larger amounts of money get spent for one of two reasons. The first reason is by helping out other family members, often children if they are in the picture or grandchildren. If finances allow, this is something I think should be more normalized. Usually children could use more help at the time than after their parents die. This is where traditional retirement plan projections show that same person that retired making $100,000 needs $250,000 a year. There is only one situation that makes this projection accurate. Long Term Care. If a person needs to live in a nursing home. This is the time that what has been done for your special needs plan already is protected against this risk. This is where you have your home protected with a Medicaid trust. Even if you spend $5,000 to set it up,...it protects an asset worth $100,000+. We'll also look at funding the special needs trust with life insurance so if everything gets spent, your child's independence still is protected. If you have more than one child, a way to have their inheritance be "fair" although not equal to what goes into the special needs trust is to help them when they are younger and could use the help more and if you choose explain the difference in inheritance. Nursing home costs are the biggest threat when worrying about what could derail and otherwise strong special needs plan. Aside from the special needs plan. People in their later years need to make sure they still have money to pay their bills, go out to eat and have the things they want. However, unless they need to live in a nursing home the traditional projection of $250,0000 is misguided. 90

WHAT CAN BE DONE WITH THIS INFORMATION? My guess it that most people reading this agree with the picture I painted of retirement compared to how traditional planning tells us our life will look like (and cost). I've shared the same information with all clients in my office and when looked at the way we just discussed it makes sense. What we can take from this is that we naturally adjust to our needs and wants. If you take a couple extra trips early in retirement, then as you see the account start to drop you pull back and make more inexpensive choices proactively. When you are going into a time where you tend to spend less anyway, it isn’t a painful thing to do. So knowing where you stand for retirement is a great thing to do. This is also why knowing what we discussed, how much you need and how much extra you have paints a more vivid picture than the calculators I used with the ability to be as complex as I wanted them to be. 91

FINANCIAL STRATEGIES OVERVIEW *All examples “Dan” who is 62 y/o, thinking of retiring now, 300k saved, Income 50k, Contribute 10% to retirement, employer contributes nothing (1) How Are We Going to Retire (2) Maximize Social Security (3) Maximize Retirement Accounts a - Savings Automate b -Taxes c - Investments (4) Increase Retirement Income (RE) a - Charge rent b - Buy real estate (Option 1; Option 2) (5) Long Term Care Planning a - Using a Medicaid Trust to Protect the Home b - Making changes to your home early, for you (6) How Are We Going to Fund a Special Needs Financial Plan a - How much do we spend on our child today? b - Where do they want to live tomorrow? (7) Living Arrangements a - Multi-family home c - Stay in the same home (8) Funding Your Retirement and Your Special Needs Trust a - Universal / Indexed Universal Life Insurance (Individual) b - Universal / Indexed Universal Life Insurance (Survivorship 92

HOW ARE WE GOING TO RETIRE? For any examples - we’re going to use the example person “Dan” who’s financial information is above. You may not want to or be able to implement one of the ideas. The goal is to give you ideas that are geared towards being able to be implemented when parents have additional responsibilities and options that work with your special needs plan rather than choosing one or the other. Along the way, I’ll add the direct financial impact these ideas create using. What you'll see is a lot of options to generate a lot of money throughout retirement in ways that could be available or with small changes be available. 1.MAXIMIZE SOCIAL SECURITY Each year someone delays retirement they benefit in two ways. First, their social security benefit increases between 7-8% each year the person delays up to age 70. Second, every year they work is a year of retirement they don’t have to pay for (their income takes care of it). True, this also shortens someone’s retirement by 1 year. As with most things there is a trade off and times where the exact opposite recommendation would be better. As powerful as these strategies are, keep this in mind with your own situation. An example for social security, if I’m sitting with someone that had a heart transplant I would be on the verge of begging them to retire (true example). If we start with an average of $12,000 being a reasonable average someone can receive from social security in retirement at age 62. If Dan waits until age 70 he’ll receive at least 50% more from social security. $6,000 x 30 year retirement = $180,000 - $96,000 (what he would have received from social security from age 62 – 70) = $84,000 benefit Savings of income paying for 8 years of retirement = $45,000 x 8 years =$360,000 Savings added to retirement account in those extra working years (no employer contribution) + $5,000 x 8 years = $40,000 $84,000 + $360,000 + $40,000 = Total Benefit = $484,000 93

2. MAXIMIZE RETIREMENT ACCOUNTS A. Automate Savings A couple things are generally agreed upon: First, it’s unrealistic for most people to go from saving 3% of their pay to saving 15% Second, when something automatically happens with doing anything, that something is more likely to happen. With this in mind many retirement plans have an “automatic increase” option. If you log into your re tirement account online or call the company you can find out. If you do, the strategy here is straight forward. Raise what you are putting in now by 2%, turn on automatic increase to happen next year for 2%. You get to choose when it stops. Have it stop at 15%. This will also help you get an idea of how much money you need to keep your same lifestyle. If money starts to feel tight. Stop the increase or go back 2%. It’s your money. You get to choose. This approach simply makes it easier to save (and know how much money you need). Increase for 8 years 2% = $10,000 added to retirement minimum *doesn’t take into account growth which would make the number higher $10,000 Total Benefit B. Taxes - Have a Plan If someone asked you if you wanted to “shut off” your taxes, most (or all) would say yes. That is how a ROTH IRA and (if through your employer) a ROTH 401(k) work. When you put money in the account you pay taxes on the money, the same as if the money went directly to your bank account. That is the point when the taxes are “shut off.” From that point on, that money can grow as much as it likes. You will not pay any taxes on the money you put in (because you already paid the tax) and you won’t pay money on how much it grows. 100% will come out of your account in retirement tax-free. This also benefits you in two ways. First, the amount the money grows would have been taxed if it was in an IRA or 401(k). Second, with a special needs trust it’s nice to have some money that can come out tax-free. If you need $10,000 to spend on an expense, with only taxable account you generally need to take out $12,000 ($10,000 for what you need and $2,000 to pay the tax).Trusts also reach the same 37% tax bracket as someone making over $500,000 after the trust takes out about $14,000. If you are working, log into your 401(k) account. Go to make a change to your contribution, when it asks you what you want to change it to, if you have a ROTH option to put your money, it will appear at that point. It’s other places and you can always call the company where the account is held at (Vanguard, Fidelity etc). This is the way I find most reliable. Increase benefit depends on the amount put in the ROTH, the growth of the investments and what your tax bracket is when you withdraw the money. 94

C. Investments - Simplify & Diversify There are certain tasks that the more you think about it the worse you do. For many, this applies to investing. Despite thousands of different investment funds, with a team of intelligent people focusing on the stock market 40,50,60+ hours a week the majority of those investment funds have a rate of return that is less than if they put their money in an index that simply tracks the average return of the market. In addition to this, investment companies charge fees to choose those investments. So you do worse than the average and then have a fee taken out. You can confirm this just about any reliable place you wish to look. And the funds that did the best one year, are generally in a completely different spot the following year(s). So what do we do with this information. We make a choice to have a lot more money and be boring. You can get excitement, from anything other than investing. If you take our example of $300,000 from above. If you move your money out of stocks because you are nervous and the market goes up, you were nervous before and now everything is even more expensive. Do you buy in and lock in a loss, do you wait. That’s my point. In that one day you aren’t in the market when it goes up an average amount you will have lost $3,000. Now if I instead handed you $3,000 and insisted you spend it on something you would enjoy that is exciting, whatever you choose would be more enjoyable than losing $3,000. And you’d be much more likely to enjoy whatever excitement you choose away from the stock market. Now think, what if the stock market keeps going up. Now it’s up 20% from when you sold. That’s $60,000. Very quickly you can have a big (negative) impact on your retirement. So what option is better? Simple and diversified. You’ve probably heard before to be “diversified” and don’t put “all your eggs in one basket.” It’s good advice. If you are certain the market is going to go up and you researched your position for hundreds of hours and then you buy the stocks you know are going to go up, then we get a pandemic, Leman Brothers goes bankrupt, real estate bubble, 9/11, oil embargo, Savings and Loan scandal and so on and so forth. You want to be diversified to protect against the ”known unknowns.” 95

It’s also unlikely you should be 100% in stocks. That type of person is comfortable watching $300,000 go down to $210,000 because they are not taking money out for 10-15 years and don’t care that much what happens in the next 3 years. All money is serious money. Retirement money is a little more serious than others. The majority of people I invested for were most comfortable with 60% of their money in stocks and 40% in bonds and other investments. Why? Because if they retired and the stock market went straight down, they could take out the money they already planned on taking out for 8 years before they would have to sell any of their stock investments that were down. And when you want to “buy low, sell high.” You don’t have to be forced to take money out of an investment that is down. And with 60% still in stocks you get the majority of the upside and avoid the worst of the downside. The last point I haven’t hit on yet is fees. A financial planner is a great person to know and can be incredibly helpful in numerous ways that most people don’t expect, but you don’t need them to invest your money. For $300,000 a financial planner will on average charge you 1.25%, they very likely will put you in mutual funds with fees of about .75% (some are higher, some lower). 2% of $300,000 is $6,000 that you can save and likely get a better rate of return too. And this is coming from someone that was a financial planner for 13 years. So where do you invest your money, in a fund that does the thing that has beat the majority of investment advisors, invest in a diversified group of indexes. You probably have heard of the “Dow Jones Index.” That is a group of 30 stocks picked to give you an idea of what the overall stock market is doing. If you want to invest in the Dow Jones you’d have to buy all 30 stocks. Simpler and less expensive is to buy an “index” of the Dow Jones and use a fund that has a group of indexes so you are “diversified” throughout the stock market, bond market, commodities, etc. Because the fund is investing in just what the average is, they simply buy those investments. This means they can charge a lot less. Generally instead of 2%, they are less than .2%. The Vanguard Target Retirement 2030 Fund (VTHRX) is an index that has roughly 64% of their money in stocks and every year it gets just a little more conservative (less stocks). So as you get to and into retirement, it’s taking less risk which most people want to do when they need to take money out of their account. Vanguard is the largest company when it comes to indexes and is also not paying me anything or even sending me a keychain. It’s simply a strategy that works. It’s not something you are likely to hear from people that get paid to invest money, because it doesn’t draw people in saying just put everything in this one fund and go about your business. But, if you compare that index to 60% stocks and 40% bonds that even a good investment advisor puts together, they are more likely to do worse than better, and you are guaranteed to pay that $6,000 every year no matter what your rate of return is. Average Advisor fee 1.25% on $300,000 for 30 years = $112,500 (amount you would have spent for investment advice!) Average fees for mutual funds (approx.) .75% on $300,000 for 30 years = $67,500 Total Savings / Money you now have, but otherwise wouldn’t if you didn’t read this = $180,000 *If you use an advisor, before a meeting ask them to put together a comparison of your investments for the last calendar year compared to your investments closest index's. 96

3. INCREASE RETIREMENT INCOME A. Charge Rent With children staying at home longer it’s commonplace and accepted to charge your child rent for continuing to live with you past age 18. If your child has special needs they may have had their SSI reduced mn\ and housing assistance become available. This is something that is often overlooked. Your adult child needs housing. There are costs that are incurred when you have an adult child with special needs living with you. Outside the typical wear and tare of using the house, often the home is modified in a way to make independence available where it previously wasn’t. This also saves the state money not only from living in your home, but other services that would have to be replaced that you gladly take on. Later we’ll go more in depth with this idea. This strategy is where everything is the same except you are now a landlord, your child is the tenant with a lease. It’s important to remember that the parents need to actually charge the rent, report that rent on schedule E when they file their taxes and pay the income tax on that money. Regardless of what tax bracket the parents are in it still is a significant amount. Amount of Income - *can vary depending on other factors. Will still help between $3,000 - $10,000+ when considered with qualifying for HUD/Section 8 x # of years. Low end benefit for at least 10 years = $30,000. Amount will likely bee significantly more 97

B. Rental Income - Buy Real Estate in a Different Way Than You've Likely Heard Before Suggesting on top of all responsibilities you currently have to become a landlord, fix leaky pipes, collect rent wouldn’t be a nice thought, but unrealistic. Here are two alternatives. i. Purchase Rental (duplex, 3 unit etc) with the most expensive things that could go wrong recently taken care of (ex. Roof, foundation,..). Take a traditional mortgage out with a short term (15 years or less) or use a Home Equity Line of Credit (HELOC) attached to your current house. Find a property manager that will take care of all the responsibilities of a landlord. This usually costs the first months rent and roughly 15% of rent thereafter. This will take the equity in your home that couldn’t be invested before and puts it to productive use similar to your retirement account. In this situation you should be receiving 10% of the homes value after paying the property manager and have to do little to nothing. All big risks (roof, foundation) have been addressed so even if there is a problem it’s unlikely to wipe out the money you earn. ii. Continuation of Strategy 1 – Many people who have between 2 and 100 rental units started the way I just discussed and as the first rental home got paid off they used the equity in that house to get another rental, and another, then another. Even if going into retirement tomorrow and not able to save another dime, this is an effective option available. If you continue and get multiple rentals you’ll soon have 1-2 homes completely paid off and can “cash out” and sell them or keep them going. This also opens the door to opportunities of taking your time to create a residence for your adult child to live in when you’re gone. You’ll have access to contractors more than someone typically would through the management company and take your time to make the space exactly what creates the greatest independence and greatest quality of life. Either way, even with 1 rental and nothing else, you now created a pension for yourself with equity that wasn’t being used previously. $250,000 Rental home taking in 10% of value in rent = $25,000 This gives you $750,000 over 30 years - $150,000 (maintenance and repairs) = $600,000 *Increase in property value is generally a wash after factoring in property taxes **does not include additional money earned by using Option II (purchasing additional rentals) Total Net Income in Retirement- $600,000 (likely more) 98

I was genuinely enthusiastic and excited writing the last section on diversifying your investments and savings a bunch of money. Everything I write is to help, which means delivering good and bad news. Long Term Care (LTC) planning is not as easy as the investment strategy I just went through. Whatever numbers you look at you’ll see odds are one person in a married couple will need long term care in their life. LTC also costs a lot. You can use $125,000/year a placeholder for a nursing home. Where you are in the United States makes a significant difference as does what nursing home you reside at. Insurance companies in the past offered LTC insurance. They would pay for your nursing home if you needed it. The companies that offered those policies either have stopped selling them all together or have raised their prices to the point they might as well not offer them. This is for a good reason. There is no LTC insurance company that is making money from those polices. Literally 0% of the companies have ever made money with LTC insurance. How did they lose so much money? They didn’t appreciate that if you have a group of 100,000 people of the same age and gender, it’s easy for an insurance company to estimate how long that group will live to be. It is not easy for them to estimate how many will need long term care and for how long. The same problem faces individual families. So that’s all the bad news out of the way. Despite everything I just said being very accurate and likely to continue to be for a long time, that doesn’t mean you do nothing and cross your fingers. There are a few options where you can minimize your risk of using all your money for a nursing home while still focusing on your quality of life. In addition, this also impacts your special needs planning. One last thing, if you are thinking of moving money or anything of value out of your name if you need a nursing home, Medicaid has thought of that. They can and will look back 5 years and if they determine you moved something out to avoid it going to nursing care (example – big withdrawal a week after being diagnosed with a disease). If they determine you did, they have the right to take that out of your estate (in order words, money that was going to go into a special needs trust). They can (and do) also penalize you. If you took out $50,000 from your bank and it's $10,000/month for a nursing home,...they'll pay for your nursing home expenses after you pay the first 5 months. In a seemingly hopeless circumstance, there are things that can be done. These are the best of those things. 4. LONG TERM CARE PLANNING 99

A. Putting Your Home in a Medicaid Trust This strategy is discussed in the legal section, but it’s impact is directly on long term care planning. Based Amount Protected - $300,000 *Amount not included in total at end B. Making Changes to Your Home It’s more common to hear about someone in retirement to “downsize” to a smaller more manageable home. It’s also more common to hear about someone moving into a ranch style home because everything is on the same floor. What I don’t see discussed that I want to add to your list of planning options is making changes to your home before you need to and after. Over the years of seeing people go through retirement there is something that rang true every time. No one wants to leave their home to live elsewhere if they don’t have to. I imagine that didn’t come as a shock to you either. What I also noticed was people insisting on doing things that made staying in their own home less likely. What I mean by this is best explained with an easy example. Someone may complain about having to shovel their driveway every year. Once it becomes a burden to shovel the driveway, and it’s not as easy as it once was, the person’s child offers to help or to set up a plow service. The retiree refuses. Claims shoveling the driveway is no big deal (this being the same person that complained about shoveling the driveway now insists on it). The reason for this is fairly straight forward. No one wants to have any independence they currently have taken away. Special needs families have a deeper understanding of this idea than most. My recommendation here isn’t to put money in “Investment A” or purchase “Life insurance policy B.” Sometimes the best financial planning advice costs little or nothing. My recommendation is to be aware that it’s understandable to resist “losing” independence when shoveling, cutting the grass, washing the car, going downstairs, replacing a light bulb, cleaning the house, doing the laundry. My view is that it’s better to allow someone else to do that task whether it’s a loved one, a friend or hire someone if that is an option. Every year thousands of adults transition to a nursing home when they would have been able to stay home if they gave up certain tasks that became a little challenging. I've seen this happen frequently and once someone is injured they no longer have a choice and have to move to receive nursing care. 100