White Coat Investor Podcast Summary

Episode: WCI #396: Financial Planning For Special Needs Kids with Dr. Bryan Jepson
Release Date: December 5, 2024
Host: Dr. Jim Dahle
Guest: Dr. Bryan Jepson, MD, Chartered Special Needs Consultant

Introduction to the Episode

In episode #396 of the White Coat Investor Podcast, Dr. Jim Dahle hosts Dr. Bryan Jepson to delve into the intricate world of financial planning for families with special needs children. The discussion centers on essential strategies, government programs, and financial tools that can help ensure a secure future for special needs kids without compromising the family's financial stability.

Guest Introduction: Dr. Bryan Jepson

Dr. Bryan Jepson brings a unique blend of medical expertise and financial acumen to the conversation. With a background in emergency medicine and a master's in finance, Dr. Jepson is a Chartered Special Needs Consultant and a CFP candidate. He currently serves as an advisor at Targeted Wealth Solutions and has extensive experience running an autism-specific clinic.

Dr. Dahle's Background and Connection

Dr. Jim Dahle shares his personal and professional journey, highlighting his upbringing in a lower-middle-class Utah family and his path through medical school and emergency medicine. Dr. Dahle emphasizes his long-standing interest in personal finance, which eventually led him to found the White Coat Investor Blog and Podcast. He also recounts his family's experience with autism, which significantly shaped his financial planning approach.

"I can see that myself and that's part of who I am and I'm trying to overcome that a little bit."
— Dr. Jim Dahle [05:50]

Dr. Jepson's Career Path and Transition to Financial Planning

Dr. Jepson discusses his shift from emergency medicine to financial planning, driven by personal experiences with his children's autism diagnoses. This transition involved acquiring advanced financial education and joining Targeted Wealth Solutions, aligning with the White Coat Investor's philosophy of low-cost, fee-only financial advising.

Chartered Special Needs Consultant Designation

Dr. Jepson explains the rigorous process of becoming a Chartered Special Needs Consultant, likening it to a semester-long course with multiple classes and examinations. This designation equips him with specialized knowledge to assist families in navigating the complexities of financial planning for special needs children.

"A lot of it I felt very comfortable with, because a lot of it is teaching about how to communicate with disabled people."
— Dr. Jim Dahle [13:04]

Working with Doctors as Clients

Dr. Dahle reflects on his surprise at many doctors neglecting their financial health despite their high incomes. He categorizes financial planners into three types: Delegators, Validators, and DIYers, encouraging doctors to actively engage with their finances, whether through self-management or professional assistance.

"Why doctors don't pay attention to that is just that that's what surprises me more than anything."
— Dr. Jim Dahle [14:15]

Identifying Financial Planner Types

The conversation moves to identifying whether individuals are Delegators, Validators, or DIYers based on how they spend their discretionary time. Dr. Dahle uses a car maintenance metaphor to illustrate these categories, emphasizing the importance of choosing a suitable financial management style.

Financial Planning for Special Needs Kids

Medicaid Planning

Dr. Jepson outlines the importance of Medicaid as an entitlement program, not merely welfare, highlighting its critical role in covering lifetime expenses for special needs individuals. He stresses that families should view Medicaid as a necessary safety net to prevent financial depletion due to ongoing care costs.

"Medicaid is our Social Security is watching. They are keeping track of your assets."
— Dr. Jim Dahle [51:00]

SSI and Medicaid Qualification

The discussion covers the nuances of qualifying for Supplemental Security Income (SSI) and Medicaid. Dr. Jepson explains that before age 18, qualification is based on parental income and assets, whereas after 18, it shifts to the individual's assets and income. He emphasizes the importance of protecting the disabled child's assets to maintain eligibility.

Government Assistance Programs

Beyond SSI and Medicaid, Dr. Jepson highlights other government assistance programs such as vocational rehabilitation, educational support, and state-specific waivers that provide additional resources and support for special needs families.

Charities and Nonprofits

Dr. Jepson recommends connecting with disability-specific advocacy organizations like the Autism Resource Center (ARC) and the Autism Society of America. These organizations offer invaluable resources, support networks, and guidance tailored to specific disabilities.

ABLE Accounts

ABLE (Achieve a Better Life Experience) accounts are tax-advantaged savings accounts for individuals with disabilities. Dr. Jepson discusses their benefits, including higher contribution limits compared to 529 plans and the ability to cover a broad range of expenses without affecting Medicaid eligibility. However, he notes the Medicaid payback provision if funds remain in the account upon the beneficiary's death.

"It's a good mechanism I think to just kind of help the day to day spending."
— Dr. Jim Dahle [33:17]

Special Needs Trusts

Special Needs Trusts (SNTs) are essential for managing substantial assets without jeopardizing SSI and Medicaid benefits. Dr. Jepson differentiates between first-party trusts (funded with the disabled individual's assets) and third-party trusts (funded by others). He explains the advantages of SNTs, such as no payback provision for third-party trusts and the ability to include multiple contributors without asset limits.

Estate Planning and Life Insurance

The role of permanent life insurance policies, like second-to-die policies, is explored as a tool for funding SNTs. Dr. Jepson shares his personal experience with such policies, highlighting their potential benefits and drawbacks, including higher premiums and the importance of aligning them with overall estate planning goals.

Tips for Parents with Special Needs Kids

Dr. Jepson advises parents to:

• Plan Continuously: Special needs planning is an ongoing process with different focus areas at various life stages.
• Protect Assets: Utilize ABLE accounts and SNTs to safeguard assets without affecting government benefits.
• Seek Professional Advice: Engage with financial planners specialized in special needs to navigate complex regulations and ensure comprehensive planning.
• Leverage Available Resources: Connect with advocacy groups and utilize government programs tailored to special needs families.

"There are a lot of things that special needs families have to think about that are different because you are planning for another generation."
— Dr. Jim Dahle [51:00]

Final Remarks and Call to Action

In closing, Dr. Dahle underscores the importance of spreading financial literacy within the medical community, particularly for those supporting special needs families. He encourages listeners to share the podcast, leave reviews, and take advantage of bulk book discounts to help educate others.

"Especially if people get this information early in their career, it can be worth millions to them over the course of their life."
— Dr. Jim Dahle [53:18]

Notable Quotes

• Dr. Jim Dahle [00:00]: "We help those who wear the white coat get a fair shake on Wall Street."

• Dr. Jim Dahle [18:44]: "Medicaid's really a lifeline for them to have needs met that become incredibly expensive over a lifetime."

• Dr. Bryan Jepson [14:15]: "Why doctors don't pay attention to that is just that that's what surprises me more than anything."

• Dr. Jim Dahle [33:17]: "It's a good mechanism I think to just kind of help the day to day spending."

• Dr. Jim Dahle [51:00]: "Medicaid is our Social Security is watching. They are keeping track of your assets."

• Dr. Jim Dahle [53:18]: "Especially if people get this information early in their career, it can be worth millions to them over the course of their life."

Conclusion

This episode of the White Coat Investor Podcast provides a comprehensive guide to financial planning for families with special needs children. Through the expertise of Dr. Bryan Jepson and the insightful moderation of Dr. Jim Dahle, listeners gain valuable knowledge on navigating Medicaid, SSI, ABLE accounts, Special Needs Trusts, and more. The discussion emphasizes the critical importance of proactive financial planning to secure a stable and fulfilling future for special needs individuals and their families.