The Disability Finance Dignity and Autonomy Problem

Special Needs Trusts, ABLE Accounts, housing cleverness, income and asset sheltering… all the things I love finding to help with finances for disabled adults and children.

What we don’t talk about enough is the harm that the need for these tools does to the very same disabled people.

How would you like it if the only way for YOU to have adequate funds for YOUR life was to give up control of YOUR money and assets… and maybe even not be permitted to work (or get married)?

Financial Dignity

We’re overdue to talk about respect, dignity, and autonomy for disabled people (as it relates to finance).

Unfortunately, there isn’t a ton that I can say or propose to change this quickly.

Our “Poverty by Design” disability services system works the way it does today.

ABLE accounts and Special Needs Trusts and SSI and ADC all work the way they work.

We can consider some choices to balance dignity with finance.

ABLE Accounts are considered “First Party” assets, so they default being under the control of the disabled beneficiary once they become an adult (I think the only way to limit this power is via a conservatorship).

Cutting off your nose…. ????

I’ve talked with some parents who’ve decided to forgo these very useful accounts to set up a Special Needs Trust (more complicated, more expensive to set up, limitations on what the funds can be used for…no housing or food).

Now, some (parents?) are concerned that these first party assets are subject to Medicaid Estate Recovery (clawback) at the time of the death of the disabled beneficiary… but are we cutting off the nose of our loved one to spite the face of the government (UGH, sorry for that image and metaphor!).

First, how much money do we think will be left by the time our disabled child dies?… because that is what we are conceivably arguing about.

Is “stopping Uncle Sam” worth stripping our child of their financial autonomy (and potential resources)?

By the way, if the disabled beneficiary has a spouse or child, this claw-back may not be triggered…. (do your own homework… but I’d like to hear what your learn)

Maximizing Autonomy and Independence

I’ve looked into the disabled beneficiary being the trustee of a Third Party Trust… and it might work or it might not.

BUT, at a minimum, you should be able to set up the Third Party Trust with the ability of the disabled beneficiary to hire and fire the trustees (and who will monitor the trustees currently, by the way?)

And the disabled beneficiary should have control of where any remaining assets get distributed when they die… just as you would want (and have) for your estate.

No easy answers here, mostly questions, using the lens of supported decision-making …

What can we do to maximize the financial autonomy and independence of disabled people in general and our loved ones in particular?

… and when are we going to get to work changing our disability services systems to stop stripping financial independence of our fellow disabled citizens?