0:02 Who are you and where are you going? What do you want? [Music] Hello and welcome to Trust and Estates Weekly. I'm your host, Kevin Bemel, and I'm here every Monday at 10:00 a.m. Pacific time to talk about estate planning and trust and uh probate administration, typically from the standpoint of professionals like my guest and me who
0:37 do this for a living. uh but also for for you so that you can better understand how to communicate with the professionals that will help you out with setting up your estate plan. And really, no matter how how simple or complex it is, the the issues the fundamental issues are are oftentimes the same. It's just uh you know with uh with additional uh wealth comes more complex mechanisms for achieving those goals. So today I'm I'm very happy to
1:13 have as my guest Satti Mclaferie sorry Mclafertie I was I was going to bungle your name I've been practicing it and then of course I did it. No problem. So, um, Sadie and I, uh, met, I think a few months ago now. Um, she's based here in California, uh, out in the Claremont area and, and so, take pity on her because it's I think it's pretty hot out there now that we've hit summertime. It is. Um, I can remember there being an August and and thinking, "Wow, I really need a introvenous water hookup."
1:49 So, and and um Sadi as as a lawyer u provides a broad range of estate planning and administration services. Uh but but her her area of uh most uh intense interest is in uh special needs planning. And so um so Sadie uh you know to kind of start us out um tell us a little bit more about your background, how you got into this and and why uh planning for special needs has become such an important part of what you do.
2:27 Yeah, definitely. So I um I've been an estate planning attorney for several years now. I used to practice in Colorado. um originally from California, lived in Colorado for a long time, moved back uh 2019 actually. So I had my first child um at the beginning of 2020, right after the pandemic hit and he was born with a rare genetic syndrome called charge syndrome. So he with that came a whole lot of medical complexities and time in the hospital, etc. So, I ended up um staying home with him as his full-time caretaker for a lot
3:02 longer than I had expected to. I was like, you know, I think being type A personality, lawyer type person, I was going to be three months home with a baby and then back at work, right? But that was just it wasn't in my cards. And very thankful that I had the flexibility to be able to stay home with him and be his caretaker for several years. Um, also added a little brother to the mix at some point in there, so that kept me home a little bit longer, but um, totally worth it. I opened up my practice doing estate planning again about a little over a year ago now, and I'm practicing in California now, like you mentioned. Um,
3:38 but because of my son, you know, I wanted to do something that was closer to my heart and felt more meaningful to me personally, and serving the special needs community is is just that. So that um that's kind of how I focus my practice this time around and um I work a lot with special needs in the special needs community and a lot with families who have minors with special needs. So you know similar situation as me. I'm talking to people at my son's school. So it's it's kind of like a natural group of people that I am around and can help.
4:15 Um, so yeah, so that's kind of how I got into doing the special needs planning and um, it just feels it feels good. Yeah, I imagine. So, so let's start at the the really at the basics. You know, we use this, those of us who are, you know, in the business, we use the term special needs. And I think we all pretty much know what we're talking about. Uh, like you, I have a daughter who's who's special needs. Although, you know, thank God, you know, high functioning. Um, but for people who are maybe not personally
4:51 involved in in that, you know, universe, if you will, talk to us first. What is what is that? What does it mean? You know, who are the the people, children, adults, you know, what are the conditions um that that sort of bring them into this broad category called special needs? Yeah, good question. So, it can be um a whole host of things. So, say for my son, he has complex medical needs. He also has intellectual disability and autism. So, we kind of hit all of the
5:26 categories at home. And but, you know, other people, they maybe have an intellectual disability or they are on the spectrum. um or they have some sort of progressive degenerative condition, you know, where their condition gets worse over time and so they may have be higher functioning, have less needs at the beginning and then end up needing a higher level of care, you know, down the road. So, with the special needs planning, what we're looking at is how do we get these people qualified for um government assistance and if they are
6:02 qualified, how do we keep them on government assistance? And so that's kind of like the big that's the legal side of it I guess is is looking at the government assistance side. Sometimes um it makes sense to strive for full government assistance and sometimes it makes sense to maybe like give them more assets outside of the government assistance and it may affect their their uh uh income from the government. But you know it's a kind of costbenefit analysis. Okay. And and before we get to, you know, more of the details of both the the legal and the practical side,
6:38 is it um typically the case that a special needs situation starts when a a a person is a child? Uh or can it you know be something that develops when you know someone is is an adult and and so then you know but still they're you know their their parents have you know essentially a you know 25year-old offspring um you know that that ends up being special needs. I'm thinking of a case, for example, where, you know, maybe a child, god forbid, was, you
7:13 know, in an automobile accident driving, right? And now they they've suffered a traumatic brain injury. Um, and so their ability to work may be attenuated, their ability to care for themselves may not be as robust as it was before. So, how you know h how do these situations or when do these situations start and and and and how do they how do they develop, I guess? Yeah, I I think it you're kind you're right on point. It can be at any point in time, right? Because there is the potential for any of us to have something like a traumatic brain injury
7:48 or some other kind of catastrophic event that prevents us from being able to provide for ourselves. So, it can be a birth condition, something like my son's rare genetic syndrome, or it can be an accident down the road when they're an older adult or something. I and then anywhere in between. Right. Right. Right. And on the other hand, and and again, correct me if I'm wrong. I'm I'm trying to explore this and sort of figure out, you know, maybe the boundaries of it a bit, but for a typical person, you know, as they age, they may be subject to Alzheimer's or dementia.
8:24 What how does how does a situation like that fit into either the the more traditional estate planning andor, you know, special needs estate planning? So with the government assistance programs that we're talking about, typically there's age maximum before or at which point we can't do this planning anymore. So um we're usually talking about younger to middle-aged adults, not kind of the elderly clientele. Uh that point we need to be looking at their own estate planning. So, if we're looking at
8:59 something like um a dementia diagnosis or an Alzheimer diagnosis, oftentimes they get the diagnosis, but they still have capacity to do their own planning. So, in that situation, we kind of want to address that planning immediately if possible before we get to the point where there are no more good days because even with a diagnosis of Alzheimer's or dementia, somebody still could have capacity to sign their documents, their state planning documents, regardless of having the diagnosis. It's a matter of whether or not they have capacity and understand what's going on in that moment and they are able to, you know, make those
9:34 decisions for themselves. And so, so as a legal matter, as we kind of transition into this part of it, does special needs at least imply that the person um being whose special needs are being addressed, lacks in some way capacity, legal capacity uh to take care of themselves or or or have have I, you know, slid off the road here now? Right. Not not necessarily. Right. So, some um people they may just have some
10:10 physical physical challenges that they're facing which prevents them from working and it qualifies them for government assistance. But they could be uh cognitively perfectly fine, right? Or super intelligent or anywhere on the spectrum, right? Um but they just have some other something else that's going on that qualifies them for that government assistance. And that includes I mean we can if we're talking about um blind or deaf people also. So cognitively completely fine but maybe we have some uh qualification for government assistance based on those conditions.
10:45 Gotcha. Okay. So there there can be an impairment but there can still assuming they're at least 18 I guess right because until they're 18 they don't have capacity right but there could be impairments in in various ways but that doesn't necessarily mean that that uh capacity uh from a legal sense is impaired. Correct. That's right. Okay. So so let's talk about this now first from a legal perspective. um what what is involved in um I guess determining
11:20 that an individual um is uh you know special needs and therefore um eligible or potentially eligible for uh for government. Well, actually let me take one step first. Um when we talk about government benefits um would you expand on that? Are we talking federal, state, local? What what are these benefits that that you know to which we've been referring that Yeah. that we're seeking to use to
11:55 help someone, you know, someone who special needs? Sure. So, there's two different types. There's some that are income based or asset based where this is kind of what we're talking about when we're talking about special needs planning um versus uh disability based. Right? So if you have a qualifying condition, you're getting these benefits whether or not you have a high asset or high income li uh limit. Um, so those are kind of those are entitlement based on your disability versus the kind where um you're low income, you have low assets, then that's
12:32 the other kind of bucket and that's the bucket that we're looking at when we're talking about special needs planning because that's where what can be affected by say inheriting money. So, if you inherit money, then we could potentially be getting kicked off of government assistance, which could be terrible because we're looking at both um medical insurance, so medical in California, um and that can be a huge expense. I mean, if you got kicked off of as as someone with ongoing medical needs, say you get kicked off of your health insurance, how how expensive is it going to be to get
13:09 different health insurance? How expensive is it going to be to pay out of pocket for your medications? You know, there's a whole host of things that are being covered just by medical that if you lose one month of medical, you could you could be really hurting financially. So, yeah. Yeah. I mean, I mentioned to you before the show started this this, you know, client I have. I mean, I think, you know, one month of of health care, you know, could be, you know, tens of thousands of dollars. And if it happens to be a particularly bad month, we're probably already into six figures,
13:44 right? So, enorm it can be enormously expensive to to care to care for someone who has and especially, you know, if they're they have 247 care or if they're in some sort of supportive facility, um, you know, that Yeah. We could be looking at many tens of thousands of dollars for one month of care. Right. Right. Okay. So, and so it it the the programs could be federally funded and or administered or it could be a state program that's either funded by the state or maybe it's like like like
14:19 medical it's at least partly funded by the federal government but it's it's administered by the state of California. So, it's kind of a combination of programs it sounds like. Yeah. And in California, our limits tend to be higher than the federal minimum. So, you know, the feds, they they set the the bar, right? And then California, because our cost of living is higher, everything is kind of more expensive here, our limits are a little bit higher. So, we get a we receive as a recipient of assistance, they tend to receive more than the federal minimum.
14:54 Okay. Oftentimes. Yeah, that that certainly makes sense. Yeah. I know when I was in the Navy and we got our basic allowance for housing, you know, California, especially Los Angeles, one of the highest allowances in the country because it's so expensive to live here, right? Right. Yeah. Okay. So, what then going so going on to the the sort of legal side of this, what are we talking about in in that realm? You know, what what needs to be done? what are some of the issues that need to be addressed?
15:30 Okay, so typically, so what I'm talking about when I'm generally talking about when I say special needs planning, we're looking at thirdparty special needs trusts. And what that means is it's somebody other than the disabled individual who is setting up the trust and putting assets into the trust. So it is not that disabled individual's assets that are going into the trust. So, this is the situation where we're talking about a parent of a child with disabilities, minor or adult child, they don't have to be a minor. Mh. Um, and so with that, what we want to do to ensure they can stay eligible for
16:05 government assistance, we want to make sure that the trust isn't distributing assets to that disabled individual um that would interfere with those assistance. So we can't we can't give uh money for something that they're already receiving money for. Basically, that's kind of like the general rule of thumb. That is the bar, right? So with special needs trust, they with a third party special needs trust, you can basically just say my trustee has full discretion to give uh funds whenever they see fit. And that
16:41 is the simplest, most flexible way because like you mentioned, cost of living is so expensive here and the allowance for housing that someone would get is like a max of $900 and something dollars or something, right? You can't even get an apartment in a safe place for $900 in anywhere that I've I've lived in California. I'm sure there are places, but not I I don't know where they are. I don't either exist. Not in LA County, I don't think. Yeah. Um, agree. So, like that's kind of the situation where the trustee would say, "Okay, well, we can keep this $900 or we could
17:17 provide a safe housing um option for this person and lose some of that $900, right? So, maybe we're providing $2,000 in housing and we're only losing $300 of the government assistance." Okay? It's, you know, that's the kind of stuff that with the full discretion the trustee can make those those determinations of whether or not it makes sense to keep full government assistance or provide further assets for that individual that may reduce the assistance just a little bit. So, it it really gives a lot of um well discretion of course, but uh better opportunity to improve the person's
17:54 quality of life. So it it sounds like the main thing is in in the on the legal side is to plan it in such a way that the the trustee has maximum flexibility to deal with this means testing that applies to the various benefits. Is is does is that sound that is how I like to do it. Yes. I like to provide the most flexibility especially because I'm working a lot of times with uh people who have minor children and those are the people that we're pro we're creating the special needs trust for. So these trusts could be going on for many decades. So I don't
18:32 know what the law is going to be like. I don't know what their assets are going to be like in 30 40 50 years. Right? So from my perspective, I like the vast the most most discretion, most flexibility as possible so that down the road we can still make it work really well for that individual. And would that discretion typically include even the expenditure of you know the capital the capital assets that are you know being used to fund the trust? Yeah, I mean it kind of depends. So, a
19:08 lot of times, you know, we're talking about families who may not have a lot of resources. So, maybe we're we're funding it with just life insurance, you know, or um or maybe maybe not. Maybe they do have a lot of resources. But either way, we want with making I mean, the ultimate goal, right, is to is to provide the best quality of life possible for our loved one. Um and in doing so, whether that means we're going to completely exhaust the resources of the trust, that may be the case, right? Um, and the benefit with a third-party special needs trust is there's no payback provision. You don't have to pay back for services that you've received
19:44 from the government. Um, I hadn't mentioned the first party special needs trust, but that's the that's the main difference between the two. A first party, you're funding with your own resources, but then when you pass away as the recipient, any resources that were spent on you from medical, there's the possibility that there's going to be state recovery. So they might recoup those expenses which of course would probably deplete the whole trust right often times. Okay, good. We're going to take a quick sponsor break and and come back.
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20:56 or visit magnumprops.com. So, this is Trust and Estates Weekly and I'm I'm your host, Kevin Bemmel. My guest is Sadi Mclaferty and uh Sadi is an estate planning and uh probate administration attorney who specializes in special needs uh planning. And we've been talking about what what that is and kind of the legal side of it. uh the you know the the um um how how to make sure
21:33 that government benefits are maintained um while providing for you know the broadest range of support uh for an individual. So um Savvy before before the break um you you um you mentioned um this this idea of of say you know medical for example being able to potentially claw back assets if it was a first person special needs trust. Um and and and so you know typically um you're dealing with uh third um third party
22:09 special needs trusts where where first of all that's not an issue but second of all it's really more of typically I suppose a parent um taking you know taking care of a child maybe a minor child or even an adult child um in in the estate planning arena stay staying on the legal side here for a few more minutes. Um, what are the um, I guess relationship requirements, if you will, um, between someone who's who wants to help, uh,
22:47 someone with special needs? Um, you know, is it required that it be parent child? Could it be say, you know, uncle nephew? Could it be essentially, you know, no familial relation? H how talk to us if you would about that aspect of of special needs uh planning with the third party special needs trust that we're talking about. There's no real requirements there. We can set up a special needs trust beneficiary. Um you can set up a special needs trust for someone who doesn't qualify for medical assistance, but you just want to
23:22 have a fully discretionary trust. So there it's really it's a really flexible tool. Um because of of that there are far fewer requirements and limitations on a third party special needs trust in terms of who can set it up, who can be the beneficiary and how the state recovers because the state does not recover from a third party like you mentioned. Um yeah, so anybody anybody can really set it up. Okay. So it could be just you know a family friend or something like that if if they you know Yeah. godfather or something like that or god parent I guess.
23:57 Definitely. And and if you if I set one up as a parent, anyone can contribute to it. So I can tell my my family or my friends who might want to provide assets on their death to my child who has special needs. I can give them the name of his trust, his special needs trust, and they can direct assets directly to that trust instead of setting up a whole sec another one in their own estate plan. They can just say, you know, this portion of my estate goes to this trust that has already been created. Oh. Oh, that's interesting. You know, all the all the years I've been doing
24:32 that, I that makes perfect sense, but I never realized that that people do that. Oh, okay. Yeah. Yeah. So, it can be a really good tool if you're expecting inheritance and you think that like you're like from other family members, say grandparents or siblings or something you um if you know or think that they might be providing in for your child in their own estate planning, then having that special needs trust already set up can be incredibly beneficial um just in terms of ease of administration and all of the other benefits. Got it. Got it. So, so now let's let's trans let's sort of move from the the
25:09 legal side of this to the more practical side of this, right? Because that's in in the end everything we've been talking about up until now is presumably there to support the actual care and enhancing of the life of of the individual with special needs. Right? So what what are the the key issues on what we're calling the the practical side of um planning and help planning for and helping uh you know a person with with special needs?
25:45 Yeah, that's a great question. So I will just I'll kind of explain it through my own experience. Okay, so I was my child's primary caretaker for four years. I my husband and I decided I was ready to go back to work. I needed out of the house. He was ready to take a break. So, we decided to switch. So, he's now the primary caretaker. While he was incredibly involved in my child's life, our child's life, um, for those first few years, he wasn't at every single doctor's appointment. He didn't go to every therapy appointment. He wasn't making all the phone calls with insurance. You know, he didn't have that
26:20 experience. So when I decided to go back to work, I realized how challenging it was to get someone else set up to take be the primary caretaker. It's taken us almost a year this whole time that I've been working to kind of we're kind of in the groove now where he's like he knows all the doctors, he knows the insurance deal, you know, he he can do it without kind of my input. So imagine if I had died instead, right? Or become incapacitated. God forbid. Wow. Right. um he would have had been stuck figuring that out all on his own.
26:56 So that has really guided how I help my clients because I don't want people to be scrambling to figure that out. It will be incredibly disruptive to the caretaker one, but incredibly disruptive to the child or adult child with disabilities. Um so there's some examples that I like to think of. So there's like a lot of kids on the spectrum may have some sensory sensitivities, right? So maybe tags in their clothing and maybe they're non-verbal. So say you have a new caretaker come in, they buy the the kid
27:31 or the adult new clothes. They don't have any idea that they don't like tags in their clothing. The child or the adult is now constantly agitated, upset, and they have no idea why. So then they have to go through this whole long checklist of what could this be? Could it be a medication? Could it be a therapy? Could it be a change in routine? Could it be who knows? This whole slew of things, right? Right. Before they get to the tag in the clothing, right? So, we want that kind of stuff documented. We want we want the transition from caretaker to caretaker to be as smooth as possible. We want it
28:06 to be easy on both the child and the new caretaker. So that is the kind of stuff that I talk through with my clients and and examples that I like to give because I I have experienced it, you know, and I um I would hate if you know I not being there and then having a new caretaker step in would be incredibly challenging. So um let's just get that down on paper. Let's update it very frequently and uh let's make this process as smooth as possible. So that's kind of that's some of the big stuff we talk about. Um there's basically it's called a letter
28:42 of intent is what you know you can google letter of intent. The ark has some a really good resource for just a generic one you can fill out a fillable PDF or something. Um but there's lots of information on that. Same with the special needs alliance. Um they have some really good articles on letters of intent too. But part of it part of it is that documenting of like likes and dislikes and then the other part is documenting history, right? So the stuff that I was saying that I had to teach my husband like what was the last thing we talked to the doctor about, you know, where are they located? What are their phone
29:17 numbers? All of that kind of stuff. We want history of what has worked and what hasn't worked because we don't want to retry something that didn't work that I know in my head didn't work but he doesn't know because he wasn't there in that appointment. Right? So, um we want to document all of that. Not just like what they're currently like medications that they're currently on, but what have we tried and they had a terrible reaction to? what what we want to put all of that stuff on onto paper so that we're not refiguring it all out again when it's already been figured out.
29:52 Now, so um talk a little bit more about this the the letter of intent that you mentioned uh you know who who drafts this uh how frequently does it need to be revised uh you know and and and and how how does it in practice how does it work? Yeah. So, um, I give a blank form to my clients. Like I said, you can find a blank form online very easily or some resources on how to create your own. Um, I also because it can be kind of overwhelming as with anything you add to
30:29 the plate of a caretaker is can be overwhelming, right? It's anything more feels like it's way too hard. So what I try and do is encourage them to just tackle one portion of it a month or one portion of it a week, whatever feels comfortable to them. I I personally have automated email reminders. So I say, "Hey, do this one section this month, right? And then next month do this other section." So we're not completely overwhelmed with looking at a 20page document and trying to rehash everything that we've learned in the last 25 years of raising this person. Oh, okay. 20 pages. Yeah, that could be
31:04 right. I mean, for instance, they could be for sure. Um, I mean, once we start talking about, you know, because the other things we want to document are, um, social activities, things that they enjoy doing, things that help calm them down or soothe them, um, things that are important to us as parents or caregivers that we have wanted to encourage them to be a part of, you know, communitywise or socially wise or anything anything like that. um or other things like so my son has Charge syndrome. The Charge Syndrome Foundation has been a huge help and big resource for me personally to learn more
31:41 about my son's condition. So that's something that I want to document for the next caregiver to know that that resource is available to them or like the deaf blind project is another one that is incredibly helpful. Um, so yeah. So I think so, oh, and then for updating it. So basically for starting it, just kind of start just start and tackle it as you can. And then updating, I I recommend just looking at it on their birthday or on the first of the year or some anniversary date that you know you can remember every year. Just take a look at it and um see what needs
32:16 to be updated because doctors change, medications change, you learn new things, you know, things stop working, whatever it may be. We want to just keep that updated at least yearly or if you think about it as things change like immediately. But like I said, anything is kind of overwhelming. So for people with OCD like me, like you get back from the doctor's appointment, you're updating the the Yeah. If you if you can do that, then that's great. And then the other the other thing that's really important, of course, is letting people know that it exists. So either having a printed copy with your estate planning documents or have it in a shared folder with the future
32:52 caregiver, some, you know, some way to share it with with people. We want to make sure that it it's known about because otherwise it's useless. Now um we're we're we're talking about a case where there is a caregiver or maybe a a primary caregiver, right? What about a situation where there are or or maybe this is doesn't happen um where there are co-aregivers if you will. So so there's kind of a a sharing of responsibility you know for for you know for to look
33:28 after the well-being of this individual. um h how do you advise dealing with a situation like that where you know now there really is a consistent need for you know communication between the two. Um and and let me let me add another thing on top. Well actually why don't you go ahead and ask that and then I'll I'll add another complication on top of that. Sure. Yeah. So um that is a very common situation to have multiple caregivers um whether it's grandparents or maybe uh the sp the parents have have divorced
34:04 unfortunately like the divorce rate of parents with special needs kids is astronomically high um so it's very common and I think you know the biggest thing is just maintaining communication and like I like I suggested possibly a shared document like a Google Drive document like it could be as simple as that or an email chain, whatever it is that is easy and useful that works, then that's the best way to do it. There is no perfect way and there's no right or wrong way. It's like whatever works for the people involved is what what you should do
34:40 because it's um it's really important to have be on the same page with this kind of with the care. Um yeah. Okay. And so you and you actually mentioned the complication which is you know what happens if you know parents get divorced and now here's this presumably innocent individual right who um you know now um you know isn't living with both parents um and u look the reality of divorce is um it it is oftentimes not amicable for
35:17 various reasons Right. So then um you know what what you know what what hap what happens there. So yeah I it's that's really hard. I think it's a really hard one when when it's not amicable. Um I don't I don't know. I haven't experienced whether court involvement would be an option where they mandate that something like this is kept up to date between the two parties. I would say that's an option, but I I don't do family law, so I wouldn't know what the practicality of that would be and actually getting implemented.
35:53 Um, but yeah, I mean, I think the it's it's an incredibly difficult situation and and when the parties are not talking to each other or aren't talking in a way where you can listen and understand and receive information and give information, then um then yeah, it's kind of it's it's really hard. And I think at that point, you do the best that you can as as one half of the party, right? You right, keep up to date as best as you can. You update your own notes as best as you can and and make sure that you've done what you can do, right? I you know and and and this is
36:28 this is not a family law show, but I I I can tell you that um you know I I I suspect that the parents could enter into a stipulation that then gets you know um essentially approved by the judge for a certain level of of communication. Um but but even that on a practical level you know if if a spouse doesn't want to comply right you know then your recourse is to you know to go to court for enforcement uh you know of that stipulation and and that can be you know challenging at best and you know right I haven't heard of a parent you know uh
37:05 you know jailed for you know not uh um you know properly uh handling you know the the other spouse having, you know, le partial legal custody, those kind of things. So, it's Yeah. Yeah. Enforcement definitely is difficult. And you, like you said, going back to court for anything, it's just going to cost more money. And what you know, we're spending resources that we want would rather be spending on our child or our other loved one, right, than than spending on lawyers and court fees, right? So, so you know, continuing on
37:41 this this this practical side of things, um, you know, you you you mentioned the issues of of making the transition. Um, and and if if if if it's not inappropriate me for for me to sort of, you know, use your your situation as an example, now you're back to work um and and and don't have primary caregiver responsibility. How do you deal with what I could imagine would be a a a sense of a feeling that gosh, I don't really know what's going on anymore. Uh and and
38:19 look, you know, two type A personalities talking here, right? Yeah. I know for myself, you know, I I I I at times have a hard time sort of letting go and saying, "Look, I don't need to know about this. You know, you take care of it." But if it were my child, uh, you know, I'm sorry, I I, you know, I want to know, right? So, how how do you, if you don't mind my asking, how do you deal with that? Um, you know, amidst all the other responsibilities you have, you know, to uh, you know, be handling
38:54 these kind of matters, you know, for with respect to your clients, right? I cry a lot. No, I mean, I'm half joking. It was really hard. I mean, it was really, really hard for me to let go. I definitely am type A personality. I definitely like to have control of things, especially things that are incredibly important to me, like the care of my child. Um, so it's been really hard. My husband have and I have worked um worked a lot on on some sort of system that works. So, for me, a spreadsheet with all of the doctor's appointments, when they
39:29 need to be made, what happened at the last appointment, and all the other logistical stuff like address and phone number and stuff like that. Mhm. Um, that's worked for doctor's appointments. My son's doctor's appointments are now much fewer and further between than they used to be. So, you know, it's it's less cumbersome. Um, which may not be the case for everybody, of course, right? I I I know at one point I was my son was had five five regular standing appointments a week plus any specialist appointments and he was seeing I don't know like 13 different specialists at some point. So
40:06 you know I went from that to now okay every six months every two years depending on the specialist. So he's you know it's a lot different now than it was several years ago. So that has worked for us. um open communication. You know, I ask questions because uh you know, I want to know and I can't help myself and I do a lot of reminding when I probably shouldn't do a lot of reminding, but that's you know, I don't I I don't know how to let go in all honesty. I don't um it's been really hard and it it took me a really long time to let go enough to fully commit myself to my business now because I kind
40:41 I started my business and I was still like half half at home. I was staying at home working, which then of course I'm parenting because I'm that's what I did. So I had to get an office. I had to remove physically remove myself to give my husband the space to take over these responsibilities. And that that honestly has been the biggest help was just me actually physically getting out of the space, not being there. Not being there. Yeah. because then he has to do it and and I have to let go and and that's that's worked for us but
41:17 but it's been really hard. I don't have a good answer for that. Yeah. Yeah. It's hard. I can only imagine. So, kind of combining for a moment the the the legal side and the practical side. So let's say that there is a special needs trust um that you know the the um you know um assets or the income from which you know is available to uh you know help the the individual with special needs. So, um would a trustee typically have discretion, let's say, to um maybe pay
41:56 for something for both the the you know, the this the the beneficiary of the trust, but but also maybe a sibling because I could imagine a situation where it's like all the focus is on, you know, my brother. What am I? You know, chop liver as we say, you know, in the Jewish world. like and and and and that could cause some real friction between you know siblings that would have a you know a a dilletterious impact on the special needs individual right so and and sort of I think this is really kind of the same question um would what kind
42:33 of discretion might the trustee have with respect to using resources to help support the caregiver um in being able to care well, you know, for, you know, for the beneficiary. Yeah, those are really, really good important points. So, as far as the relationship with the sibling goes, that's challenging. So, you can kind of set it up however you want as the person creating the trust. Um, typically the special needs trust will only be for the disabled individual. Um and then we
43:09 would say direct part of our assets to the special needs trust and part of the assets to um the non-special needs trust that uh for the benefit of the other sibling or siblings as it may be. Uh whether you direct 5050 if there's two kids involved that's up to you, right? Because do they have equal needs? Is the other sibling going to be a high earnner? Do you know that? Are they ambitious? Are they in their PhD program right now? Or are they already, you know what I mean? Are they already working?
43:44 Right? You know, those are all things to consider. What's kind what's their personality like? You know, can we can't predict the future, so we don't know. Um, the other thing I also like to remind people is that trusts are living documents. We want to be revisiting these every several years. So, as we get to know our kids better, as their personalities develop, as we maybe have a better idea about the earning potential of each child or the the needs that they might have, then we can make changes to those trusts as as we get older or as they get older, we all get
44:19 older. Um, as we have a better idea of what what's going to play out, right? Um, and so we want to we want to make sure that we're looking at them at least every three years, maybe more frequently if you have a special needs beneficiary. Um, but I I recommend to all my clients, whether special needs or non-special needs beneficiary, we're we're reviewing it every three years to make any adjustments as needed because we don't want to think of this as a static document that's just one and done and then you never think about it again. Right. Okay. We're going to take another sponsor break and then we'll come back and talk about supporting caregivers.
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45:30 searching. So th again this is uh Trust and Estates Weekly and my guest is Sadi Mclafy. We've been talking about um special needs planning and uh right before the break I I asked Sadie a question. So, you know, when there is a special needs trust, um, what what could what kind of discretion does the trustee have with respect to I I don't want to use the word supporting because that that sounds
46:06 too broad, but but like helping the the caregiver or the co-aregivers cope with this this situation. And I mean it's when I say it's burdensome I don't mean that you you know they don't want to do it but I mean it's it's it's a there's a heavy emotional burden there there's there can be a heavy physical burden especially you know day after day you know I can imagine especially for parents it's not like you you know oh five o'clock you know I'm done right you're you're on call 24 hours a day you
46:43 know seven days a week right it's reminds me of being a a chaplain in the Navy only worse, right? Because sometimes I could say, "No, sorry. I'm not on call. Call the other chaplain." Yeah. Right. But you can't do that as as a caregiver. And and it's uh I I can imagine no matter how deeply you love, you know, the the child for whom you're caring, there are times when, you know, you just you feel like I don't think I can take this another moment. So yeah, what what can the trustee do to help um
47:18 address mitigate uh I don't know care caregiver burnout should we call it? Yeah, that's a great I mean that's a really good question. I think um for me having a child who's he's only five um he we received respit care through regional center. We only started receiving respit care recent like maybe in the past six months or something and we only get 20 hours a month. So, you know, it's it's like So, I'm sorry. What is respit care? Oh, good. Sorry. You're right. Um, respit care is basically a pair a pay regional center who's through the uh
47:53 state. Um, they pay for a caregiver who works with people like my child, right? So, okay. We we have a respit worker who actually knows my kid through school. So, she's both works at the school and is also registered as a respit care worker. So it's basically I mean it's it's a babysitter except that they have special qualifications. So it's not Okay, gotcha. Babysitter would be reductive, but you know it's they but that's kind of like the idea. It's somebody that can come in that can make sure your child or person your
48:28 individual is safe, they're cared for, you can take a break, right? So that's that's what respbit is. Um, I don't know the answer of whether or not that continues on into adulthood. Um, Mhm. I'm not sure. But in terms of how the trustee can support, I mean, they can pay for an IND for some sort of other caretaker to come in. They could pay for use trust assets to relieve the caretaker for how you know they need nights off every once in a while or what whatever it is, you know. Okay.
49:03 Um, yeah. So they they can definitely use resources in that regard. Um I mean can they pay for a spa day for the you know or is that going too far? You could build that into your trust. I would say if you wanted to encourage that I would have that written out maybe not necessarily in the trust but in in instructions to the trustee which you can do separately from the trust which may not be legally binding but it gives them directions on how to use their discretion. Okay. Um, and you can use that for kind of a host of things. You know, if you want to encourage certain social social
49:39 interactions or whatever it is, you want to go to the movies every Friday night, you know, put that in those letters. Um, and then in terms of like other types of support, I mean, they could the trust can pay for um accommodations for the house, you know, like upgrades to the home if the home needs to be um have some remodels done to accommodate the the child or adult. um you know they can they can provide those types of resources too to make sure that the living situation is comfortable for everybody if it need if that means like a a different living
50:15 situation then that's possible too. Okay. Um but there's a lot of flexibility in that discretion. Okay. So putting in ramps or grab bars or right anything like that or Yeah. Um I I mean could they you know could the would the trustee have discretion to in essence sell an existing residence to buy another one that's more appropriate? I mean would it be to that level? Oh okay. Okay. Yeah. Wow. Yeah. So they yeah they have a lot of discretion. So um when someone sets up a special needs trust um initially will
50:52 the grtor typically be the trustee as well or is is that not permitted? How how does how do how does that how does that work typically? Yeah. So, if we're looking at like the a very common situation where the parents are setting up this third party special needs trust for the benefit of their child who has some sort of disability and uh qualifies for um government assistance, then yeah, they would be the trustee. They because they're the the current caretaker, they're currently managing the finances. Um, one thing that I do recommend though is is triing
51:28 um the success your succession plan while you're still living. So you have you're the trustee. Say I created the special needs trust. I'm the trustee and the grtor, but I have named successor trustees. So something happens to me. We have successors in place. Same with caretaker, right? We have a successor caretaker plan in place. I want to trial that during my lifetime to see if it's going to work. So have the successor trustee step into your shoes. See how managing those assets works for them. Have the caretaker step in. Do overnights, weekends, a week, a
52:04 month, you know, kind of like let's see if this thing is going to work because we really want it to work when when it when it's needed most. And so we can do that kind of stuff during life while everybody has capacity and can we can make changes still if it's if changes are needed. So that I've talked to a lot of estate planning attorneys on this show. No one has ever brought up the idea of sort of testing in essence live your the succession part of yours and and honestly that is a brilliant idea and shame on me for not
52:40 thinking about it because you know in the military that is exactly what we would do right we train for you know the actual situation and and in a way that's what you're suggesting is you know get some you know actual training see how this is going to work in practice and I I think it's great Not only for the grand tour but for the people who are going to take over the responsibility. They can be nervous about that too. How is this going to work? Am I going to be able to handle it? much better for them to have a sense of how all this is going to go while you know the the you know the the grtors are still alive and and
53:16 people who have experience can help guide them help give them confidence or in the worst case scenario be able to say you know what I I I know I told you I wanted to do this and I'm willing to do it but honestly I'm just not able to do this you know god god forbid this happened when you know the parents were gone now what's going to happen right terrible situation. Yeah. And the other benefit too on the other side of the spectrum is now the the the individual with the disability, the person that we're talking about has had this experience of having someone else care take care of them, having
53:51 staying with this other caretaker or the caretaker staying in their home with them. Um so when something does happen and this new caretaker steps in, it's not brand new. They didn't just, you know, lose their parents and then also have this crazy disruption. They have someone that comes in that's like they've done this before. You know, we've done trials for a week or a month or whatever it is and and we know what we're doing and so um for everyone I think it's more comfortable. Yeah. Yeah. That that strikes me as absolutely being the case. Yeah.
54:26 So, we're we're we're you know running up on our our time limit here. Um what other advice, thoughts, um you know, have have we not covered um that that that we we should, you know, for the people watching this or listening to this? Yeah. I think um when you mentioned siblings and relationships, I think that's a big one that we didn't touch on yet. Um because oftentimes, you know, as a parent, we're like, "Oh, my kid, my other child would take care of him." Like you said, it is a it is a burden. I mean, doesn't matter how much we love
55:02 this person, it's a lot of work. It's always going to be a lot of work, right? It doesn't I can love my son as much as as much as I possibly humanly can. It's still a lot of work, you know, and me giving that responsibility to my other child, is that a fair thing to do? Mhm. On the flip side of it, do we want that relationship? If if my other son is managing Bodie is is my son with charge syndrome, if Arlo is managing Bod's finances for him, do we want that kind of power dynamic?
55:37 Probably not. Because if if Bod's over here using his talker, his speech device, and saying, "Hey, buy me this, this, or this." And Arlo's like, "I can't." You know, then we have do we want this? I you know I for brothers maybe not. So that's the kind of stuff we really want to explore and and that's when people like you can come into play with a professional fiduciary so we're not um we're not putting that that side on to a loved one who then has to say no right and and maybe creates tension in the relationship. we have some imper impartial person who's following the letter of the trust and following the
56:13 letter of the law in order you know and they can say no because they don't have that you know personal tie well and also all of the sibling dynamics and all all of that stuff right that's been built up you know we'll say that doing the work that we do we absolutely see you know every the result of every bad familial decision ever Right. It plays out in probate court, unfortunately. Yeah. And and honestly, what I see is that Okay, so the parents are like this glue that holds the family together.
56:48 They're the only people that when tensions arise between the siblings, they can kind of tamper it down pretty easily. The kids will still listen to them. Even if they're 50, they'll still listen to them. But then once the parents pass away, we don't have that checks and balances anymore. And so these deepseated resentments or mom loved you more than me or you got everything because you needed more or whatever this is. You know, all of that comes to the surface. So then now we have someone in control of someone else's money and we have this deep hurt maybe
57:24 and you know how does that play out? It's it's not a great dynamic to put on your kids. Yeah. No. And and it occurs to me too that someone can deeply love their sibling um and they don't want to be feeling these feelings like you know mom took better care of you or cared more about you but but these are natural human feelings and so to put them in a situation where they're essentially in conflict with themselves is also pro not necessarily you know a prudent thing to do either. So yeah agreed. Absolutely. It's hard.
58:00 Well, Sadie, this has been so enlightening. Thank you so much for for being a guest on the show today. I really appreciate it. Thank you for having me. This is a lot of fun. I'm glad to share this knowledge with people. Good. Good. I'll have you um if you don't mind, just hang tight for a minute. I'm going to do a quick wrap-up and then we can talk offline. So, thank you all very much for joining us today. I know we we have some people watching live. That's always nice to know. If you have any questions, thoughts, if uh if you want to get in, so this is I always joke this is the part of the time when I give the shameless plug for my guests because Sally like all my guests way too
58:38 humble to do that. But you can see that the the depth of her knowledge uh and and her personal experience how well qualified Sadi is to help you with with this you know particular with with estate planning in general but this particular aspect and uh itself. So um you know Sadie with your permission I will put your contact information in the show notes as well so that if people want to reach out to you they can. Um, but if you have any questions, comments, um, all the links to social media will be in the show notes as well. We'd love to be able to hear what you think. Um, real quickly, tomorrow at 10:00 a.m.
59:15 Pacific time is, uh, my show, Business Lessons from the Military. And then on Wednesday at 10:00 a.m. is my show, People. These are all Pacific time, people making money. So, I hope you'll join me later on in the week and would love to see you. and Sadie, once again, thank you so much for being on the show today. Really just outstanding uh information and and advice for for everyone. And signing off as I always do, Marie Darling, you are my bell. Courage at all times, my friends.