I believe that you do what you say, and say what you do. I believe leadership requires you to be able and willing to do those things you are asking of those you lead. We have an expression in the Army that perfectly sums up this notion. It’s called shrinking the “say-do” gap. That is, reducing the non-congruence between what you espouse or instruct others, and those things you are willing to do yourself. In other words…put your money where your mouth is! So what does this have to do with finances for special needs families? I have a confession to make….
I am no different than 84% of Special Needs Families (SNF). I don’t have a Letter of Intent (LOI) for Hugh. I inherently know the value of a LOI, I just don’t want to do it. I don’t like thinking about the topic. I have been diligent in establishing estate planning documents. My Will, Power of Attorney, and First and Third Party Special Needs Trusts are all established and sitting in my fireproof safe. I’ve got insurance and funding mechanisms in place for the Trusts. I am planning for our own retirement, while at the same time ensuring we maintain financial flexibility for Hugh. So why is this simple letter so tough? Because I don’t like the idea of someone else taking care of Hugh in our absence. It’s emotional…not logical…and needs to be addressed. I need to practice what I preach. This post is about holding myself accountable.
What is a Letter of Intent?
A Letter of Intent (LOI) contains information about how you want your loved one to be cared for when you are unable to. It documents your life, financial and legal plans. But it is even more than that. If your child or loved one ever needs care that won’t be personally given by yourself or your spouse, you have the right as their parental guardian to ensure that the assistance they receive aligns with the standard of care you strive for. This letter is meant to detail your expectations when it comes to caring for your child. Failure to leave instructions will only ensure your child’s life falls apart faster than anyone can figure out how to help. You are their voice. When you are gone, your LOI is your voice.
It’s important to think about who you might want to care for your child if you are ever unable to. You may have already thought about who will take care of your loved one in your absence. Maybe it is a brother or sister, one of your child’s siblings, or a friend of the family. Ideally you have a plan in place in your Last Will and Testament to determine guardianship. Perhaps they know your child well and have been involved in your child’s life. Even so, they don’t know your child and their needs the way that you do.
A letter of intent is a wonderful tool to give you peace of mind knowing that your child will be taken care of the way that you desire them to. Imagine if you are the new caregiver. Do you really want to be figuring out a child’s needs and preferences, or would you appreciate a guidebook to help you along the way? Drafted correctly, a LOI is that guidebook.
Who drafts it?
You do! It may be one of the most important documents you produce. It is not a legal document and you do not need an attorney to draft a LOI for you, although many attorneys will be glad to help you (for a fee). You can draft it, print it out, sign it, and keep it with your estate planning documents and important papers. I also recommend you provide a copy to your estate planning attorney as well as the Trustee if you have already identified who that will be.
Before you draft it, you need to have a deep conversation with your family about their wishes for your child too. At a minimum, talk with someone you trust. Set aside dedicated time to draft each of the sections. This is not something you can likely complete in one sitting. The more you put into it, the more your successor will get out of it.
What to include?
I really like the idea proposed by Hal Wright in his book The Complete Guide to Creating a Special Needs Life Plan. Hal highly recommends a family narrative, rather than a fill in the blanks type form. The narrative he describes helped paint the picture on what life was like for a Special Needs Family (SNF). It narrated a week in the life of their daughter and described her relationships, likes, and qualities that made her special to her family. It made him feel empathy and create a sense of her humanity even though he had never met her. What an awesome idea!
Special Needs Alliance has a very comprehensive newsletter about each of the categories you should include. Ultimately you should include as much information as necessary to enable a complete stranger to adequately care for your child. At a minimum you will want to include:
- Contact information and family history
- Financial information
- Government benefits such as SSI, Medicaid, and housing assistance
- Special Needs Trusts
- A.B.L.E accounts
- Medical history
- Lifestyle and living arraignments
- Daily schedule and activities
- Diet preferences and restrictions
- Identify those activities that bring joy
- Education requirements and aspirations
- Important social relationships
- Religious environment
- Lastly, you may want to express your wishes for burial or funeral arrangements.
Often Elder Law Attorneys or Special Needs Financial Planners will have formats that you can use. Here is an example from Litman Krooks LLP who drafted the Special Needs Alliance newsletter I referenced above.
I drafted it, now what?
So you dug in, and put pen to paper and drafted your LOI. Awesome!!! But you’re not done. It should be treated as a living document. Preferences, medications, and life circumstances change overtime. Ensure you keep it up to date. I recommend as part of your annual financial review with your Financial Planner, you also review your LOI and capture any pertinent changes. If it is sitting in your dusty fireproof safe, you might be putting it at risk because the people who need it may not have access to it. I recommend you share it with your attorney, financial planner, and most certainly with your trustee each time you update it.
It is also a best practice to scan it and store it digitally. Many Financial Advisors will provide you encrypted cloud based storage for your important financial and estate planning documents. There are even companies that have created applications to help you organize, store, and share your LOI like SpecialVest*.
Time to stop procrastinating! Let’s get it done!
*Disclaimer: I have no relationship with SpecialVest, nor do I receive any material benefits for recommending them.
So I took my own advice and finally created our own letter of intent using SpecialVest. Interested in my review? click here.
Categories: Estate Planning