Lifetime Income for the Adult Disabled Child

What does it take to secure lifetime income for an adult disabled child after their parents are gone? This episode is a sequel to the Adult Disabled Child episode, where Barbara Treadwell identifies a wonderful resource and walks through a detailed discussion of how to set up a plan for guaranteed lifetime income for the adult disabled child. Drawing from her own experience as a mother and a Certified Financial Planner (CFP®), Barbara shares what she wishes she had known sooner.

What’s in This Episode:

• Barbara's personal experience raising her son Terry and the long-standing concern about who would care for him and how after her death
• How watching her own podcast episode about a couple with a 37-year-old disabled son prompted a middle-of-the-night breakthrough
• The 72T provision - a section of the tax code that waives early withdrawal penalties for persons who are totally and permanently disabled
• How lifetime income annuities can be structured with the disabled adult as the annuitant, not the parent as the owner
• Using affordable term insurance to bridge the gap between a disabled person's current age and age 50, when annuity income could begin
• The key differences between qualified, non-qualified, and Roth accounts, and why this distinction matters for disability planning
• Why qualified money placed into a trust triggers an immediate tax, and why non-qualified money works better in a trust structure
• The difference between a special needs trust and a revocable trust, and how each affects eligibility for government assistance programs
• The EDB (Eligible Disabled Beneficiary) provision, which allows a totally and permanently disabled person to receive lifetime IRA distributions rather than the standard 10-year rule
• Testamentary trusts as a no-cost planning option for families whose primary asset is a 401k plan