Latest / Wisdom For What's Next / When Disability Changes Your Family’s Financial Plan
Transcript
- Megan Jewett: for what's next. I'm Megan Jewitt, co-founder and wealth advisor at Craft and Sage Wealth. Today we're going continue our discussion about loss and what that looks like to navigate those challenges. In previous episodes, we've talked about the loss created when you have a loved one pass away. we've also talked about the loss created through divorce and what that looks like and ways you can help protect and plan for yourself in that regard. But today we're going to talk about another subject that also creates some form of loss, and that's disability, whether that be disability of a spouse, Or a child, or you know, more often than not, as women especially, that requires us to take on a caregiver role, which we're more than happy to do, but it does alter our lifestyle and alter our overall financial picture in a lot of ways. And so obviously, like we've talked in the past, these types of losses and changes are always unexpected. We never know when they're coming. So we owe it to ourselves and to our families to make sure we are doing our very best to plan ahead for these unexpected events. as you can imagine, the illness or disability of a loved one, especially your spouse, can create a lot of financial instability. It could go from having two incomes in your household to having one. Having your caretaking responsibilities align with just your children's needs to not having to caretake for your spouse. All of these things create a lot of rockiness, especially if you're not prepared. So, today we're gonna talk about ways you can prepare yourself for life's unexpected events, especially in regards to disability. you wanna make sure that much like we've talked about in previous episodes, you understand your account titling. So if you have accounts in your household, obviously outside of an IRA, those have to maintain individual ownership. But if you've got an individual bank account, if you've got individual investment accounts that don't have joint titling on those, you need to make sure that those are funds that wouldn't require some form of joint titling if one of either You or your spouse were to become disabled. You still want to have access to those funds, and maybe through your spouse's disability, that means they can no longer manage those things. So you'll want to make sure you review not only your beneficiaries, but how things are titled as well. And that could be anything from investment accounts all the way down to bank accounts. Your home be sure that you've got that titled appropriately. you have that listed with the appropriate beneficiaries should something happen going forward. another Item that we've talked about as well, but I can't stress enough is to make sure you understand how to access your accounts. We live in a day where everything is online and technology makes things easy, but you want to make sure you have access to the list of passwords, how to get into these accounts. You understand the inner workings of the websites you may be utilizing to access these accounts. So you want to make sure you have a good grasp on those things because disability creates situations where we all have to take on responsibilities. that maybe we weren't in charge of before. So make sure you protect yourselves by knowing how to access these funds and these accounts. Depending on the type of disability that affects your family, it may make sense to reach out to Social Security. There are a lot of Social Security disability benefits. They come with their own intricacies on eligibility for those, but that would be a good thing to pursue should this change happen in your family. Make sure you reach out to them, you understand what your options are and how to qualify for those benefits, especially if your loved one can no longer or provide in a limited capacity. There may be benefits there that you qualify for. One thing you to make sure you do understand though about social security benefits, and this is something that if you contact the social security office, you're gonna wanna make sure You just explore all options, but there is a difference between utilizing an ex-spouse's earnings record for Social Security and disability income. So you want to make sure that you know don't get those confused. That is something that anyone in the Social Security office should be able to assist with. But just make sure you're asking all of the questions and that you're exploring any and all options that they may be able to provide. Another area that you might want to focus on is to review your insurance policies. There are several employers that provide some sort of disability insurance, whether that be long term or short term. Short term is going to help you get through those first few months or days, depending on the type of policy you have, and long term Is just what it says, more long term in nature. You want to make sure you understand the ins and outs of those policies and how you become eligible for those should an unfortunate event happen and disability strikes. another way you can plan for the unexpected is to really make sure you have a grasp on your cash flow. And we've talked about this in previous episodes, but the same holds true for navigating disability. You want to make sure that you understand where your cash flow is coming from and where it's going out to on a monthly basis. If this person that you are now caring for and that is disabled in your home was the primary wage earner, you wanna understand what are other options and avenues you Can explore to either mitigate or replace some of the income loss that has now been created, whether that be tapping into an investment account or a retirement account. Those are things that a CFP and financial advisor can walk you through. If you have that portfolio available to you, where does it make the most sense to create that income stream for you while you navigate what's most important, which is caring for your loved one? so you want to make sure you understand those cash flows and that you have a good grasp on the impact of turning on a new income stream, especially if you're doing so within a portfolio. Does this create add-in tax liability? does this create any sort of impact on your? you have a good understanding of all of those things. And that's where again having that team of a good CPA, a good estate planning attorney, a good financial advisor are going to help you navigate those intricacies of your planning. Another avenue that I've had clients pursue to create a more positive cash flow, especially when their normal cash flow is not the same going forward, is utilizing the equity in their home. either utilizing a home equity line of credit on their home. It's you know paid off, those are things that you can tap into to utilize that equity of a non-liquid asset to provide liquidity while you figure things out. Maybe not the most ideal, but it is an option. some of my older clients have also utilized reverse mortgage, their home's paid for, they don't necessarily need it as a legacy planning asset. What they need more. of is immediate income. So those are all options that you can pursue and that your your CFP can help you with to try to create an element of income flow in the now right when you need it. So just know there are options out there. And there are so many avenues to pursue. So just make sure that, you know, before panicking because your income or income flows have changed, just make sure you are pursuing all of those options. We touched on the need for review in your estate plan. And this is gonna be the same whether you're navigating death, divorce, or disability. And so in your estate planning, make sure the estate planning professional you are working with does understand your need in this moment and maybe how your needs have changed since when you since you originally put your estate plan in place. If you have a disabled child, for instance, there are a lot of estate planning tools out there that can help protect your disabled child and continue their eligibility for any federal programming. In the future, to where their inheritance from you does not disqualify them for such benefits. You know, and as we've mentioned all along, all of these things are unexpected. For me, when I'm planning for my daughter who is on the autism spectrum, I don't know who she's going to become. So in my own estate planning, I have provisions in place to make sure she's taken care of no matter what. These are all things that your estate planning attorney can help you navigate and walk through to make sure that your wishes are being carried out exactly how you intended them to be and that the people that you love the most are being taken care of. And I would say, you know, one thing that maybe is not overly financial in nature, but something that I absolutely think people need to understand and give themselves grace for is how are you as the caretaker going to have just a few moments for yourself, right? You're taking on a role that is incredibly hard. Depending on what disability you're navigating with your loved one, there could there could be a lot of requirements on you that there haven't been before In regards to caregiving and still maintaining your home and managing the day-to-day, but doing so more where you have that primary responsibility. You have to make sure you allow yourself just even a few minutes of time to breathe and to navigate next steps. And just I can't stress this enough, and it's you know, I see it a lot with the women that I work with. I have felt this and been reminded of this from a personal standpoint and reminding my She was caring for my dad. just give yourself a lot of grace. You're a lot stronger than you even think you are, or even know you are, but you're doing it, you are navigating the day-to-day. showing your resiliency even if you if it doesn't feel like it and you don't think you are. So please just take care of you. if you're a mom, we know it all starts with us, typically in the household. So if we don't take care of ourselves, it's gonna be really hard to take care of those around you. Thank you for joining me today. This wraps our three-episode series on the 3Ds: death, divorce, and disability. Obviously, these affect a lot of women, but they're not exclusive to just women. This impacts everyone. So hopefully you found these episodes to be helpful. If so, make sure you follow the podcast. You can also find additional information about myself and my firm at craftandsage.com. You can leave information for me there, those will get to me and we'll be sure to discuss these topics going forward. Coming up in future episodes, we're gonna be bringing on several guests in regards to estate planning. I also have a forensic accountant coming on who's fantastic. so we're really looking forward to those episodes. If you'd like to reach out to my team or myself for a free consultation, you can contact us at craftinsage.com.