Financial Planning for Autism

Autism Acceptance Week: Empowering Families with Financial Planning

Autism Acceptance Week is an annual event promoting acceptance, understanding, and support for individuals with autism and their families. During this week, communities and organizations worldwide come together to raise awareness about the unique challenges faced by individuals with autism and to celebrate their strengths and contributions.

One of the most significant challenges faced by families facing disabilities, particularly those with members with autism, is the financial burden of providing care and support for their loved ones. Higher medical and therapy costs, specialized education programs, and difficulties with employment can all add up to create significant financial stress for families.

Families can strive for long-term financial independence by creating a comprehensive financial plan that addresses short-term and long-term needs. Accessing government support and financial aid programs available for individuals with autism can also provide additional financial relief.

Overall, greater awareness and support for individuals with autism and their families and effective financial planning can help address the unique challenges these families face and ensure a brighter future for individuals with autism.

Understanding Autism and Its Financial Implications

According to estimates from CDC’s Autism and Developmental Disabilities Monitoring (ADDM) Network, about 1 in 36 children has been identified with autism spectrum disorder (ASD). The disorder is reported to occur in all racial, ethnic, and socioeconomic groups. However, it is more common among boys, occurring more than four times as often as in girls.

A study conducted between 2009-2017 found that approximately 1 in 6 (17%) children aged 3-17 years were diagnosed with a developmental disability, including autism, attention-deficit/hyperactivity disorder, blindness, and cerebral palsy, among others. Parents reported the diagnosis.

Family members with autism face unique financial challenges due to the higher costs associated with medical care, therapy, and specialized education programs. For example, therapy costs can range from $50 to $200 per hour, and families may need to pay for multiple therapy sessions per week. Specialized education programs can also be costly, and families may need to pay for private schools or tutors.

Individuals with autism may also face difficulties in the workforce, with unemployment rates as high as 90% for adults with autism. This can create additional financial stress for families, particularly as individuals with autism may require additional support and accommodations in the workplace.

Early intervention is critical in improving outcomes for individuals with autism and reducing long-term costs. Studies have shown that early intervention can improve language and social skills, reduce challenging behaviors, and increase independence. This can ultimately lead to a better quality of life for individuals with autism and reduced long-term costs for families.

Different government support and financial aid programs are available for individuals with autism, including Medicaid, Supplemental Security Income (SSI), and the Individuals with Disabilities Education Act (IDEA). These programs can provide financial relief and access to necessary services and resources for families with autism.

Overall, understanding the unique financial implications of autism is critical in providing adequate support and resources for family members with autism. Early intervention and accessing government support and financial aid programs can help alleviate some of the financial burdens these families face.

The Role of Financial Planning in Supporting Families with Autism

Financial planning can play a critical role in supporting family members with autism by providing a roadmap for achieving their financial goals. Financial planning can be essential for families as they navigate the unique challenges faced by individuals with autism.

One important financial tool for family members with disabilities is a special needs trust, which can help ensure that assets are managed and used appropriately to benefit the individual with autism. Another helpful tool is an ABLE account, which allows individuals with disabilities to save and invest money without jeopardizing their eligibility for government benefits.

Life insurance is another critical consideration for families who have family members with autism, particularly for parents who may be the primary caregiver for their child. Life insurance can provide financial security in the event of the parent’s death, ensuring their child will continue receiving necessary support and care.

A comprehensive financial plan should address short-term and long-term needs, including medical expenses, housing, and long-term care.

This may include budgeting, saving for future expenses, and managing debt. Accessing government support and financial aid programs, such as Medicaid and SSI, can also be important in managing the costs associated with caring for an individual with autism.

Financial planning can be crucial in supporting family members with autism, particularly as they navigate the disorder’s unique challenges and financial burdens. By utilizing financial tools and strategies and accessing government support and financial aid programs, families can strive to ensure the long-term financial independence and well-being of their loved ones with autism.

The Importance of Financial Planning for Family Members with Autism

Financial planning is critical for families with people with disabilities, particularly those with autism, as they navigate the unique challenges and costs of providing care and support for their loved ones. A comprehensive financial plan can help ensure long-term financial independence.

A critical aspect of financial planning is addressing both short-term and long-term needs. This may include creating a budget, saving for future expenses, and managing debt. Families should also consider the costs associated with medical care, therapy, housing, and long-term care.

Different financial tools and strategies can help families achieve their financial goals. One important tool is a special needs trust, which can help ensure that assets are managed and used appropriately to benefit the individual with special needs. ABLE accounts can also be helpful, allowing individuals with disabilities to save and invest money without jeopardizing their eligibility for government benefits. Life insurance can provide financial security in the event of the caregiver’s death, ensuring their loved one will continue receiving necessary support and care.

Practical tips for financial planning include creating a budget and tracking expenses, seeking out government support and financial aid programs, and working with a financial advisor with experience in planning for people with disabilities. Families should also review their financial plan regularly to ensure that it continues to meet their needs and goals.

Financial planning is critical for families with special needs, particularly those with autism, as they navigate the unique challenges and costs of providing care and support for their loved ones. By utilizing financial tools and strategies and creating a comprehensive financial plan, families can help ensure the long-term financial independence and well-being of their loved ones.

The Able Act, SSI & Medicaid

An ABLE (Achieving a Better Life Experience) account is a tax-advantaged savings account designed for individuals with disabilities, including those with autism. The account allows individuals with disabilities to save and invest money without affecting their eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI).

Contributions to an ABLE account can be made by anyone, including the individual with the disability, family members, and friends. While contributions to the account are not tax-deductible, earnings on the account are tax-free. Withdrawals from the account are also tax-free if they are used for qualified disability expenses, such as education, housing, transportation, employment training and support, assistive technology and personal support services, and healthcare expenses.

One of the key benefits of an ABLE account is the ability to accumulate savings without affecting eligibility for government benefits. Prior to the creation of ABLE accounts, individuals with disabilities were limited in the amount of assets they could accumulate without jeopardizing their eligibility for government benefits. With an ABLE account, individuals can save up to $17,000 (2023) per year without affecting their eligibility for SSI, and some states allow for even higher contribution limits.

Overall, an ABLE account can be a valuable financial planning tool for individuals with disabilities, including those with autism, and their families. It provides a way to save and invest money while still maintaining eligibility for government benefits, and can help individuals achieve greater financial independence and security.

Important facts to keep in mind regarding the ABLE Act:

The designated beneficiary of an ABLE account is the eligible individual who owns it and must receive SSI or disability benefits based on blindness or disability that began before age 26 or be subject to a disability certification.
A disability certification, signed by the individual or someone else establishing the ABLE account, must confirm the relevant impairment and include a physician’s diagnosis.
Only one ABLE account is allowed per eligible individual.
Contributions to an ABLE account cannot typically exceed the annual gift tax exemption, but a working beneficiary may contribute additional funds up to a specific limit.
Distributions from an ABLE account must be for the benefit of the designated beneficiary.
A person with signature authority can establish and manage an ABLE account for a minor child or someone unable to control the account themselves.

It’s important to note that Qualified Disability Expenses (QDE) are a crucial aspect of the ABLE Act. These expenses are incurred for the benefit of the designated beneficiary and related to their disability, including education, housing, transportation, employment training and support, assistive technology, and related services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for ABLE account oversight and monitoring, funeral and burial, and basic living expenses.

In addition, it’s possible to rollover funds from one ABLE account to another. This can involve either the distribution of some or all of the funds to the ABLE account of a member of the original designated beneficiary’s family or a limited amount from a qualified tuition plan (also known as a 529 plan) to the ABLE account of an SSI applicant, recipient, or deemor. (A deemor is generally the ineligible parent or spouse of the individual who is eligible for (or receiving) SSI)

Under the SSI Program, only assets above $100,000 count as a resource. If an ABLE account balance exceeds $100,000 and causes an individual to exceed the SSI resource limit, the SSI payment is suspended until the countable resources exceed the allowable limit.

For the Medicaid Program, if an ABLE account balance exceeds $100,000 and causes an individual to exceed the SSI resource limit, they still retain eligibility for Medicaid as long as they remain otherwise eligible. However, if non-ABLE resources exceed $100,000 and cause the individual to exceed the resource limit, Medicaid is suspended.

Under the Medicaid Payback Provision, when a designated beneficiary dies, a portion or all of the remaining ABLE account balance must be distributed to a state that files a claim against the beneficiary or the account itself for benefits provided under their Medicaid plan. Before paying such a claim, the ABLE account must first cover funeral and burial expenses and any outstanding payments for the beneficiary’s qualified disability expenses. The payback amount is limited to the total medical assistance paid for the beneficiary after establishing the ABLE account, minus any premiums paid to a Medicaid Buy-In program. After the statute of limitations for filing Medicaid claims against the beneficiary’s estate expires, any remaining ABLE account balance can be distributed to a successor designated beneficiary or the deceased beneficiary’s estate. Some states have limitations on payback, so it’s best to check specific state plan disclosure documents for details.

Special Needs Trusts

Special needs trusts are a type of trust designed to provide financial support for individuals with disabilities while allowing them to continue receiving government benefits. Also known as supplemental needs trusts, these legal instruments are typically created by family members or friends of the beneficiary, although they can also be established through a court order or by the beneficiary themselves.

The purpose of a special needs trust is to supplement, rather than replace, government benefits like Medicaid, Supplemental Security Income (SSI), and other means-tested programs with strict asset and income limits. By placing assets in a trust, the beneficiary can receive supplemental financial assistance without losing access to these critical government benefits.

There are two types of special needs trusts: first-party and third-party. A first-party trust is established with funds belonging to the beneficiary, such as an inheritance or lawsuit settlement. In contrast, a third-party trust is funded by someone other than the beneficiary, such as a parent or grandparent. The rules governing these trusts can be complex and vary by state, so consulting with an attorney experienced in special needs planning is essential.

Special needs trusts must be carefully crafted to ensure they comply with applicable laws and regulations. The trust must be drafted to ensure that the funds are not considered countable assets to determine eligibility for government benefits. Additionally, distributions from the trust must be carefully structured to avoid reducing or eliminating eligibility for government benefits.

One advantage of a special needs trust is that it can provide a reliable source of supplemental support for the beneficiary throughout their lifetime. Another advantage is that it allows the beneficiary to continue receiving essential government benefits, such as healthcare coverage and income assistance.

Tips for Employers and Financial Advisors

Employers and financial advisors play a role in supporting families with special needs, particularly those with autism. By providing tailored support and resources, they could potentially help families with tools and knowledge to plan for long-term financial goals.

Employers can support employees with special needs by offering flexible work arrangements, such as telecommuting or flexible hours, to accommodate their caregiving responsibilities. Disability insurance can also provide financial security if an employee with special needs cannot work. Mental health resources, such as an employee assistance program, can also be valuable in supporting the emotional well-being of employees and their families.

Financial advisors should understand the unique economic challenges faced by families with special needs and be able to provide tailored advice and services. This may include knowledge of government support and financial aid programs, such as Medicaid and SSI, as well as specialized financial tools and strategies, such as special needs trusts and ABLE accounts. Advisors should also be able to guide on creating a comprehensive financial plan that addresses both short-term and long-term needs.

Advisors should also be able to guide on maximizing government support and financial aid programs, such as Medicaid and SSI. For example, they may advise families to set up a special needs trust to ensure that assets are managed and used appropriately for the benefit of the individual with special needs without jeopardizing their eligibility for government benefits.

Overall, employers and financial advisors can be critical in supporting families with special needs, particularly those with autism. By providing tailored support and resources, they can help families have the necessary tools and knowledge to achieve long-term financial security and peace of mind.

Final Thoughts

Financial planning and community support are critical for families with members with disabilities, particularly those with autism, as they navigate the unique challenges and costs associated with providing care and support for their loved ones. A comprehensive financial plan can help ensure long-term financial independence, while community organizations can provide valuable resources and support to families.

Financial planning can involve utilizing financial tools and strategies, such as special needs trusts, ABLE accounts, and life insurance, and accessing government support and financial aid programs. Employers and financial advisors can also be essential in providing tailored support and resources to families with special needs.

In conclusion, families with special needs, particularly those with autism, should seek resources and support to help them create a financial plan that helps ensure long-term financial independence. By working together and accessing the necessary resources and support, we can create a more inclusive and supportive community for individuals with special needs and their families.

About Mark Matos

Guide to Selling a Business

The Importance of Planning for the Sale of a Business

Selling a business can be a life-changing event for many entrepreneurs. However, it is essential to understand that the sale of a company has significant tax implications that can affect the amount of money you walk away with. Planning can help you minimize your tax liability and maximize your profit.

Overview of what the article will cover

This article will provide a comprehensive guide to planning for the taxable sale of a business. We will start by discussing the tax implications of selling a business, including an overview of capital gains tax, the treatment of assets sold as part of the business, and other taxes to consider. We will then delve into different strategies for minimizing taxes on the sale, such as installment sales, private annuities, and tax-free reorganizations. We will also discuss different sales types, including asset and stock sales. Additionally, we will cover the steps to take before selling the business, including reviewing financial records, identifying potential tax strategies, and preparing for due diligence by potential buyers. Finally, we will touch on other important considerations, such as dealing with existing contracts and agreements, handling employee issues, valuing the business for tax purposes, and planning for life after the sale. By the end of this article, you should understand how to prepare for the taxable sale of your business and how to minimize your tax liability.

Understanding the tax implications of selling a business

Overview of capital gains tax

You will likely have to pay capital gains tax on your profit when you sell your business. Capital gains tax is a tax on the increase in value of a capital asset (such as a business) that you have held for a particular time. The tax rate for capital gains varies depending on how long you have kept the asset and your income level.

Treatment of assets sold as part of the business

In addition to the sale of the business itself, you will also need to consider the tax implications of selling any assets that are part of the business. You can sell assets as part of an asset sale or stock sale. If you sell assets as part of an asset sale, you will need to determine the tax basis of each asset and calculate the gain or loss on each asset sold. If you sell assets as part of a stock sale, the tax treatment can differ, as the buyer is purchasing ownership of the business.

Other taxes to consider

Other taxes to consider when selling a business include state and local, employment, and sales taxes. Depending on the state of the company’s location, State and local taxes can vary. Employment taxes may include Social Security and Medicare taxes, federal and state unemployment taxes, and workers’ compensation insurance. Sales taxes may apply to certain types of sales, such as the sale of tangible personal property or the provision of certain services. It is essential to consult with a tax professional to determine which taxes apply to your specific situation.

Understanding the tax implications of selling a business

Overview of capital gains tax

You will likely have to pay capital gains tax on your profit when you sell your business. Capital gains tax is a tax on the increase in value of a capital asset (such as a business) that you have held for a certain period of time. The tax rate for capital gains varies depending on the time you have held the asset and your income level.

Treatment of assets sold as part of the business

In addition to the sale of the business itself, you will also need to consider the tax implications of selling any assets that are part of the business. You can sell assets as part of an asset or stock sale. If you sell assets as part of an asset sale, you will need to determine the tax basis of each asset and calculate the gain or loss on each asset sold. If you sell assets as part of a stock sale, the tax treatment can differ, as the buyer is purchasing ownership of the business.

Other taxes to consider

Other taxes to consider when selling a business include state and local, employment, and sales taxes. The company’s State and local taxes are affected by where the company is located. Employment taxes may include Social Security and Medicare taxes, federal and state unemployment taxes, and workers’ compensation insurance. Sales taxes may apply to certain types of sales, such as the sale of tangible personal property or the provision of certain services. It is essential to consult with a tax professional to determine which taxes apply to your specific situation.

Sale of a Business

Asset Sales

Tax Implications of Asset Sales

In an asset sale, the buyer purchases individual assets of the business, such as equipment, inventory, and real estate. The seller must determine the tax basis of each support and calculate the gain or loss on each asset sold. The tax rate for each asset can vary depending on the type of asset and how long it has been held. For example, the tax rate for long-term capital gains on assets held for more than a year is generally lower than that for short-term capital gains on assets held for less than a year.

Structuring the Sale as an Asset Sale

To structure the sale as an asset sale, the seller must negotiate with the buyer to determine which assets to sell. The seller may also want to consider how the sale of individual assets will affect the overall sale price of the business.

Stock Sales

Tax Implications of Stock Sales

In a stock sale, the buyer purchases ownership of the business. The seller does not need to determine the tax basis of individual assets, as the buyer is essentially taking over the company as it is. However, the tax treatment can differ for stock sales, as the buyer is purchasing ownership of the business.

Structuring the Sale as a Stock Sale

If the seller wants to structure the sale as a stock sale, they will need to negotiate with the buyer to determine the purchase price for the business as a whole. The seller may also want to consider any liabilities associated with the company that may transfer to the buyer in a stock sale. Stock sales are likely more tax favorable for the seller because lower capital gains may rates apply instead of ordinary income tax rates.

Steps to take before selling the business

Reviewing financial records and tax history

Before selling your business, reviewing your financial records and tax history is essential. The review will help you understand the current financial position of your business and identify any potential issues that may arise during the sale process. For several years, you should review your income statements, balance sheets, cash flow statements, and tax returns. It is also helpful to work with an accountant or financial advisor to ensure that your financial records are in order and accurate.

Identifying potential tax strategies

In addition to reviewing your financial records, you should identify potential tax strategies that may help you minimize your tax liability on the sale. Strategizing ideas include installment sales, private annuities, and tax-free reorganizations. Working with a tax professional can help you identify the most beneficial strategies for your situation.

Preparing for due diligence by potential buyers

When selling your business, potential buyers will want to conduct due diligence to evaluate your business’s financial and operational health. Due diligence may include reviewing your financial records, contracts, and other essential documents. To prepare for due diligence, you should ensure that your financial records are up-to-date and accurate. It helps if you are prepared to answer potential buyers’ questions about your business. Working with a business broker or attorney who can help you prepare for the due diligence process may be helpful.

Other considerations for the sale of a business

Dealing with existing contracts and agreements

When selling your business, it is crucial to consider any existing contracts or agreements that may impact the sale. You may consider including contracts with customers, suppliers, or employees. You should review these contracts carefully and ensure you comply with all the terms and conditions. You may need to renegotiate or terminate these contracts before the sale.

Handling employee issues

Selling your business can be a stressful time for your employees. It is essential to communicate with your employees throughout the sale process and ensure that they understand what is happening. It would help if you also considered any employee benefits, such as retirement plans or stock options, that the sale might impact. It may be helpful to work with an attorney or HR professional to ensure that you comply with all applicable employment laws.

Valuing the business for tax purposes

When selling your business, you must value the company for tax purposes. Cost basis analysis helps you determine the tax basis of the business and calculate the gain or loss on the sale. Several methods for valuing a business include income, market, and asset-based approaches. It may be helpful to work with a business appraiser or valuation expert to determine the value of your business.

Planning for life after the sale

Finally, it is crucial to plan for life after the sale.

Planning may include:

Determining how you will invest the proceeds from the sale.
Developing a new business plan.
Deciding what you will do next.

It is also essential to consider any tax implications of the sale and how they may impact your future financial planning. Working with a financial advisor can help you develop a plan for your future after the sale of your business.

Conclusion

Recap of key points

Planning for a business’s taxable sale is essential to minimize tax liability and maximize profit. You must understand the tax implications of selling a business, including capital gains tax and other taxes. It is best to consider different strategies for minimizing taxes, such as installment sales, private annuities, and tax-free reorganizations. Before selling your business, you should review your financial records, identify potential tax strategies, and prepare for due diligence by potential buyers.

Other important considerations include the following:

Dealing with existing contracts and agreements.
Handling employee issues.
Valuing the business for tax purposes.
Planning for life after the sale.

Importance of consulting with a tax professional

Selling a business can be a complex process, and working with a team including a financial planner, tax professional, and attorney can help you navigate the tax implications of the sale is vital. A tax professional can help you identify potential tax strategies and ensure that you comply with all applicable tax laws.

Encouragement to start planning early

Planning for a business’s sale should start early to give you time to identify potential tax strategies and address any issues that may arise. Starting early and working with a financial planner, tax professional, and attorney can ensure you are well-prepared for sale and minimize your tax liability.

About Mark Matos