Financial Planning For People With Disabilities
Note: This post is pretty specific to the United States, because that’s the area where I have the most experience, although some of what I say here may hold true for other areas of the world. I would LOVE for readers in other regions of the world to talk about financial planning issues for people with disabilities in the comments here, and I’d be very interested in comparing and contrasting the way in which financial planning is handled for/by people with disabilities around the world.
I am not a planner. I am sometimes accused of being the anti-planner, especially when it comes to finances, and have operated for years under the “oh, there’s money in my bank account? That’s because I haven’t spent it yet” school of financial planning. However, it’s been brought to my attention on numerous occasions that financial planning needs to start early, and if you “only” save some pittance (which seems very large to me) every year you’ll be set up for life when you want to retire.
Which brings me to a whole lot of assumptions about financial planning when you’re a person with disabilities, because things get a lot more complicated. People with disabilities are at increased risk of being poor, and of being financially abused by family members and caregivers. We are among the most vulnerable in the population, and probably most in need of financial planning, because one of the most serious expenses people can face is medical expenses.
Yet, we’re put in a position here in the United States where financial planning is actively discouraged.
First of all, try meeting with a financial planner to explain that you are a person with disabilities making plans for yourself. Most financial planning conversations literally surround people with disabilities. The assumption is that you are a parent or family member making plans for someone else. The idea of financial autonomy for a disabled person is actually treated as almost laughable. Are people with disabilities not allowed to be worried about our financial future? Are we presumed to be incompetent because of our disabilities? Is it assumed that any finances available to a person with disabilities come from someone else anyway, so why should the person ostensibly being planned for have control over them?
Once you’ve managed to convince a financial planner that you really do want to make plans for yourself, you are going to run up against the fact that if you are disabled, the government believes that you should be in a state of poverty. If you make any money at all, your share of cost when it comes to government benefits is going to increase. Thus, there’s functionally no difference between making some money every month and making no money every month, because when you make any money, it will be taken. The idea of saving, of making plans for the future, is simply ludicrous.
The only way to set up any sort of long-term financial planning, if you are a person with disabilities in the United States, is to establish a trust. A trust which is controlled by someone else. A trust which holds all your assets, except that they aren’t yours anymore, because they belong to the trust. And the trust has to be carefully structured to avoid running afoul of government regulations.
It is incredibly humiliating to be told that the only way you can plan for the future is to surrender all assets to someone else so that this person can act as a trustee. And, all this while, you must hope that the trustee will not abuse the trust, will administer it responsibly, won’t accidentally disburse too much and get you knocked out of government benefits plans.
If you inherit money, you will be deemed ineligible for government benefits until the money’s all gone. If you get a job, ineligible for government benefits. Almost any assets which come into your hands will be taken away; you are “allowed” to have $2,0001. That’s it.
This is not acceptable. People with disabilities want to plan for the future just like everyone else. Some of us would like to try and set aside funds for our children to use to go to college. Some of us would like to be able to buy houses. Some of us would like to know that we have a safety cushion of funds in case something happens; in case we need to leave marriages, find a new house in a hurry, pay for something the government won’t fund, repair the car. Some of us like to do really frivolous things like eating.
For me, there’s an active disincentive to plan. It’s in my best interests to not set funds aside, to not care for my finances wisely. For many people with disabilities, working (if you can and want to) is not in your best interests. People wonder why we don’t “contribute more to society”? It’s because we are barred from it by policy; we can’t work or produce creative works which are purchased by others or we risk losing access to the benefits we need to survive. Paul Longmore wrote about this in his excellent essay “Why I Burned My Book,” and it’s something which really needs to be addressed. We are treated like second class citizens in so many areas, but not being allowed to engage in financial planning is especially problematic and dangerous.
Acting like government benefits are enough is disingenuous. Telling us that we can’t be fully active in society if we want to retain those benefits is discriminatory. And pretending that disabled persons have no interest in their future is just plain hateful.
- Yeah, on its own, $2,000 is not a paltry sum. But what if you need to move and you need money to pay first, last, and deposit? What if you have to go to the hospital? What if your car needs a new engine? What if…? ↩