Shaun Tucker: Hello, and welcome to our PracticeLab podcast, where we talk with advisors about what makes them successful so that you can apply those lessons in your business. I’m Shaun Tucker, the Director of Practice Management here at Capital Group.
If you’re one of our regular listeners, you know we’ve been talking about AI on this podcast for a couple of months. And if you’ve visited our Capital Ideas website, you’ve seen a lot of other AI resources there.
But today, instead of talking about AI, we’re going to talk about another very important topic that might not be on your mind at all: special needs planning.
Here’s the thing. Special needs planning isn’t just critically important for your clients. It can also be hugely beneficial for your practice. We all want to find more planning opportunities in our books, create more meaningful connections with clients and stand out more to prospects and centers of influence.
Well, special needs planning is one way to do all of that. To explain how, my colleague Winston Chang spoke with Stephen Norton, president of Saybrook Wealth Group in Connecticut. Let’s listen in.
Winston Chang: Just before we begin, we need to disclose that about halfway through this conversation, Steve talks about qualified disability expenses for ABLE accounts. Know that if withdrawals are used for purposes other than qualified disability expenses, the earnings will be subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax.
Hey Steve. Thanks so much for joining us today on the PracticeLab podcast.
Really good to have you here. For our listeners who don’t know you, you mind giving us a quick introduction to yourself and your practice.
Stephen Norton: Sure. As you said, my name’s Steve Norton. I’m really excited to be with you here today, because this is a topic that’s very near and dear to me, both ABLE accounts and more broadly speaking, special needs planning.
I’m the president of Saybrook Wealth Group. We are an RIA firm. We manage roughly 250 million of client assets both on a discretionary and non-discretionary basis. We have a sub practice within the practice called ABLE Planning and we have a specific website for that ableplanning.com.
SN: Great. And you mentioned Steve, that Saybrook has an ABLE accounts sub practice, and then you, yourself, Steve, you’re a chartered special needs consultant, not something, you know, you see every day.
So, you know, I know you have both a personal and a professional interest in special needs planning. Could you tell us a little bit more about that and your journey?
SN: Yeah. I felt kind of compelled to dig into special needs planning, specifically because of my son. He was diagnosed at a fairly young age with having autism.
Additionally, he has A.D.D. and other intellectual disabilities. And I remember back then feeling somewhat lost and at times, had a sense of hopelessness about the situation. It was really, truly overwhelming. And as time went on, I realized I would love to be a catalyst to help people in that situation.
If I could go back and talk to my 20 plus year old self at that moment when that diagnosis came in and having an ability to try to offer, uh, hope and a path forward for people, uh, was something that just has been internally eating at me for a long time. So eventually that led us to having the sub practice within our practice that addresses those kind of things.
So, financial special needs planning presents different challenges, it can be quite rewarding. It kind of throws some of that normal, the normal planning scenarios out the window at times. One of the things to be thinking about is like, if you think of college planning, we can all go online and use various tools for college planning. And that modeling is fairly straightforward and I think our industry does a great job in helping people through 529 plans, to plan for those expenses. But special needs planning is completely different.
It’s much harder to map out support costs for a lifetime, for a special needs individual. There’s a saying that applies pretty accurately for couples that have a special needs child. And that is that they’re often planning for a three person retirement, not a one person retirement. The situations are always different.
Sometimes neurodiverse people can live independently, for example, and sometimes they cannot. At times, disabilities of course can be both physical and intellectual, so each case is different and life expectancies based on the condition can also be different or not typical. And one thing that might sound kind of strange when I put it this way, but it’s actually quite rewarding as a financial advisor for me, in helping families with these situations because it’s not the same every time.
These are complex problems and it’s actually quite intellectually challenging to put all the pieces together to solve these issues. And they’re not ever really completely solved, but to make a big impact for these families is quite rewarding. And because these problems are so complex, I’m constantly learning. There’s not a new family that I work with, that I’m not learning something new each time we go through a special needs planning case. One of the things that I kind of set out to do when I decided to commit helping families with special needs challenges was to help them reduce their fears and anxieties.
These situations are overwhelming. They can feel quite isolating. Your kid, if you have a special needs kid, is not a typical kid. Unfortunately, families with these situations, couples face divorce rates that are much higher than typical households, and the day to day can be exhausting.
Which leaves little time for planning for the future. As an advisor to this community of individuals and families, to me, it’s important to provide hope and reassurance. The victories in the process and the victories as a parent of a special needs child are different, but there’re beautiful moments that occur.
Things that you wouldn’t think about as, in terms of what would be considered normal. Like for me, I cannot tell you how gratifying it was for me to watch my son for the first time tie his shoes consistently. Something that you would probably take for granted with a normal child, but that was a big victory for him.
Making a sandwich or preparing food for themselves. There’s all these accomplishments that are everyday things that we take for granted of being able to do that are really major milestones for this population. And it’s really, um, for me, quite gratifying to put myself in the role of helping families to kind of celebrate these things and try to focus on the positive.
It’s really a, a population that, it is a necessity, in my opinion, to work with this group with empathy, having compassion and I think humor is also a necessary component in helping these groups.
SN: Yeah. Steve, thank you, for being so transparent. Not just about how your practice has evolved, but also your personal journey.
I’m wondering if there are listeners out there who are hearing you talk about this. Who are tuning into this podcast right now and thinking like, okay, that’s an incredible journey. That’s an incredible story. Of course, Steve crafted his practice this way. But I don’t have that journey. I’m not personally affected by it. Is this for me? Is this for my practice? You know? Maybe, it comes off as not genuine or I wouldn’t know where to start.
So, I guess talk to that population, which I think is a pretty big chunk of our listeners right now. What would you say to them, just your everyday advisor who’s listening to this and thinking like, this is important. I just wouldn’t know how it applies to me.
SN: Yeah, that’s a great question.
I think the belief that it doesn’t apply to you is, frankly, probably a misjudgment on an advisor’s part. The prevalence of disability is frankly staggering. If you think of autism in particular, one in 31 children in the U.S. is considered to be on the autism spectrum, and that’s, uh, the CDC’s number.
SN: Hmm.
SN: So yes, you may not have a direct experience in your own life with it, but if you think more broadly, I’m sure extended family, if you have any amount of clients in your client base, there’s going to be families that are impacted by this.
And I think, as an advisor, you know, we always want to connect with our clients, not only in a sense of how we can help them with their finances and to grow their wealth and manage their wealth, but we also want to connect with them on a personal level. And I think by being aware of the prevalence of disability, you can have a dramatic impact with your clients in terms of the connection you make with them.
I mean these clients that are impacted and people that are impacted by having a family member or a loved one with disability. As I said earlier, it can be kind of overwhelming and to be seen and recognized and frankly having empathy for that situation, for those clients, I think really lack of a better way of saying it can cement your relationship with them.
It’s something that is very prevalent and yes, again, you may not have personal experience with it, but we all want to help our clients in the way that they need to be helped and being aware will help you to do that.
SN: Right, right. Thanks Steve. Okay, so now I want to get a little tactical.
So let’s start with ABLE accounts. Let’s just get real 101 here, Steve. What are they? Can you give us a little bit of background?
SN: Sure. And to be clear, it’s one of many tools that should be utilized in special needs planning. But ABLE accounts are savings accounts or investment accounts that are built specifically for people with disabilities. ABLE accounts allow individuals to save money while protecting benefits that otherwise might be put in jeopardy if they had too many assets in their name.
ABLE accounts offer similar protections to special needs trusts, but with greater ease of use.
SN: Yeah. So who qualifies? Can you give us a little more definition about who qualifies there?
SN: Sure. To be able to open an ABLE account, the individual must have had a physical or mental disability that began before age 26.
This age threshold actually is changing, on January 1st of 2026, the onset of disability is changing from age 26 to 46. And that’s gonna greatly increase those who are eligible to use ABLE accounts. And in terms of who qualifies, enrollees need to meet a few different criteria and one or more of these criteria.
For example, have a written diagnosis from a doctor, currently receiving SSI due to disability or if you have received SSI but it’s suspended due to excess income or resources, you’re still eligible for an ABLE account. Someone receiving SSDI can also open an ABLE account. And there’s a Social Security Administration list, and if you have a condition that’s on their list of compassionate allowances, there are certain childhood diseases and specifics that are, that you can dig into the Social Security Administration’s website to find that list, that also would be something that would enable someone to open up an ABLE account.
SN: Great. We’re recording this in June 2025. As of right now, what are the contribution limits? What are the rules about that?
SN: Currently the contribution limits are $19,000 a year annually. However, just like many things with these types of plans, there’s always a twist and turn if an individual has a job.
So if you are disabled and have a part-time job and that disability occurred before age 26, and you are not contributing to an employer sponsored plan, you are allowed to contribute to an ABLE account from your earnings.
That can come from multiple sources. It can come from family members, friends, gifts, et cetera, can be supplemented by employment income. One thing to keep in mind though is you can only have one ABLE account at a time, and getting benefits is not a requirement for ABLE eligibility. It’s just one avenue to have eligibility.
SN: Got it. Thanks Steve. So we talked about contribution. What about distribution? What qualifies as an expense? What are the rules about that?
SN: That’s one of the best things about ABLE accounts is that more broadly speaking there’s a quality of life clause, if you will. So distributions must be used for what’s considered a qualified disability expense.
And there’s two tests to determine if something is a QDE. Does it relate to the individual’s disability? And then more broadly speaking, does it maintain or improve health? Does it provide for independence or improve quality of life?
So these criteria are intentionally broad. So on the quality of life side, you know, as an example, I think of setting up an ABLE account for our son that years down the road, he has two quote unquote normal sisters who are in some ways his biggest advocates in life. If they are in different states than he is, money in the ABLE account could be used to travel to visit with them.
It could also be used to pay for having one of them go on vacation with him. Because again, that’s improving his quality of life. So there are a lot of things that it it can be used for, can be used for legal expenses, living expenses, food and grocery. It doesn’t interfere with SNAP benefits.
It doesn’t interfere with HUD benefits. So if somebody has a disability where they’re getting, for example, section eight housing or HUD related benefits, ABLE accounts don’t interfere with that. Interestingly, special needs trusts can interfere with section eight housing. So, what oftentimes you can do is take a special needs trust, pour money from the special needs trust into the ABLE account, and then use the ABLE account to pay for things that are not permissible within the special needs trust.
It has to be managed properly, but the two can work very well together. The good thing about ABLE accounts, I almost think of them as a first step for families that ABLE accounts, you don’t need a lawyer to set up an ABLE account. A special needs trust is more heavily involved.
SN: Yeah. Steve, that’s a great segue to special needs planning more broadly. You mentioned ABLE accounts as a great first step. What are other products and services advisors should be thinking about when it comes to special needs planning?
How do you fit ABLE accounts into that broader picture?
SN: I think the interesting thing about it is, as I mentioned, you’re solving for complex problems, and I think that also relates to an opportunity for an advisor from a business perspective. And the reality is we all need to earn a living, as financial advisors.
And when you’re dealing with special needs planning, I’ve had situations where I’ve set up a special needs account or an ABLE account, for example, for a client. And then we’ve had $800,000, $900,000 rollovers of retirement plans because when we do our planning for these families, we’re doing it in context of not only the special needs individual, but the other family members that are supporting that special needs individual. So mom and dad need to have their house in order in order to be most effective in helping that special needs loved one, um, because if their finances are a mess, they certainly won’t be in a position to help the special needs family member.
The other thing that it also presents an opportunity for is life insurance. Life insurance is an important tool in the special needs planning toolbox, if you will. Particularly, second-to-die policies for couples that will fund a special needs trust. And that gets to the part that’s kind of
addressing the component where you’re feeling overwhelmed. Like I think of myself as a 27-year-old and hearing the news of that diagnosis, I wish I had known at that point or been thinking at that point, oh, I should load up on life insurance while I’m young and healthy.
And we try to do that for clients as well. So the thing that we look at for that is not everyone can afford a permanent policy to begin with. So if you think of that young couple who just gets that diagnosis and they’re feeling overwhelmed, and the last thing that they feel capable of doing is funding an expensive life insurance policy.
That’s okay, ‘cause you can get them a term policy focusing on the features of the policy that allow for conversion. And that component is very important. There are plenty of inexpensive term policies, but what you want to focus on is a term policy that has conversion benefits. By conversion, what I mean if you don’t know, is that, down the road, the 23-year-old gets the life insurance, but at 43 they have a medical condition that would preclude them from getting new life insurance. So if they have a 30-year term policy that allows for conversion, they can convert it into a permanent policy without having to go through underwriting.
SN: Excellent. Thank you, Steve. A lot of advisors, I would imagine, haven’t done much special needs planning in the past, and they may not even know which of their clients’ families are affected by special needs.
From a client communication, client relationship perspective, what do you recommend in terms of broaching that topic? Like how do you naturally make that part of your client service model?
SN: I make it part of the regular intake that we do when we sit down with folks for the first time. We’re asking them to bring in statements on where they might be investing currently.
We ask our clients to bring in copies of, for example, their 401(k)s, through work. We also ask them to bring in the list of the available investment options within their 401(k)s, ‘cause we try to add value by shedding light on things that they might want to consider doing differently within programs they’re already participating in.
We also will talk about budgeting. We’ll talk, it really kind of depends on the situation and the client, but broadly speaking, we also talk about family. And I have it right there on our intake: Do you have a family member that you have concerns about that has special needs? And, uh, hopefully that will solicit from them an honest answer.
People are pretty open, fortunately today with it a little bit more so than they maybe had been historically. So it just kind of comes up in conversation. The other thing that helps me with it and maybe helps him feel a little bit better about it is we have some artwork around my office that my son has done.
And it’s interesting, his gift, he has all kinds of issues, but his gift is art. And there are things where I’ll look at what he’s doing and it will almost look like modern art. It will look almost like graffiti art. And then if you sit him down with a picture of a bird, he can draw it and make it look like it’s out of an Audubon catalog.
You know, he has trouble having a conversation with you, but he communicates with the world in his own way and one of his ways is through art. So we have examples of things like that on the wall, that will help stimulate that conversation as well. But broadly speaking, I think it should just be part of your intake.
You should be asking the question, “Do you have someone with that is dependent on you financially, that has special needs?”
WC: Right. I would imagine that at this point, Steve, you’re also known for it, right? You mentioned it’s on your website, you know, the first thing that people see when they come to your digital storefront, so to speak.
I would imagine that, centers of influence, uh, that the CPAs, estate planners, lawyers that you work with, they know you, they know to refer people to you for, when they recognize that clients have that need.
SN: Yes. And I think that actually represents, frankly, a big opportunity for a younger advisor that wants to dig into this.
You know, if you think of centers of influence, I always think of CPAs first and foremost. I have great relationships with attorneys that refer me, a lot of people as well, but CPAs see money in motion. They also are, at least once a year, talking to all of their clients. So in doing that, if you approach that CPA as, I’m a financial advisor, hi, my name is Steve.
I can help your clients with investing and planning for their future, refer them to me. That doesn’t ring home as well as I have a focus on helping families that face special needs situations. The beauty of that for the CPA and from a marketing standpoint, frankly, for you as a younger advisor, is that CPA is gonna go through the Rolodex in their head.
Of the families they know that are impacted by that. And because there is such a prevalence, specifically I think of autism and the high prevalence of it, there’s such a prevalence of it that they will immediately start thinking of people that that applies to, as opposed to putting it in their head, Hey, think of somebody I can help.
What does that mean? Who do you pull outta your brain where that makes sense? Whereas you’re being much more directed on the special needs side. In the area that is focused on, and this isn’t meant as a criticism, but it’s just a reality, there are life insurance companies that are focused on special needs planning, and life insurance is a key component of one of the solution sets for special needs planning, but it is not the end all and be all. There are other things that can be done. So, I think you can differentiate yourself by being independent in the sense that you can offer insurance solutions, you can offer ABLE accounts, you can network with attorneys and help those people establish special needs trusts.
So by being more broadly focused on the solution set, rather than simply looking to, oh, I can get a big life insurance policy to help these people. That’s one of the ways that you can help. But I think holistic planning really is important when it comes to special needs planning.
WC: Yeah. Yeah. Steve anything that I’ve missed in this conversation that you would wanna make sure that you mention?
SN: I think the thing that I would say that maybe I didn’t comment on more fully is the usefulness of ABLE accounts for a variety of purposes, but coupled with special needs trusts. We don’t charge our clients to set up ABLE accounts. We’re an RIA firm, so there’s no A share sales. We’re doing fee-based shares of ABLE accounts through the American Funds.
To me, I’m at my root and core, an investment guy, and the accumulation aspect of having growth in an ABLE account to me is very exciting. You can get ABLE accounts out there and they’re just like 529s. There’s virtually every state has one. And some of them have things like checkbooks or debit cards that the individual participant can use.
To me, that’s not where the focus should be. The focus in my opinion, should be using investments that have growth because you’re creating a fund for that individual that they can use longer term. One of the other things that I didn’t comment on that should be taken into account is the influence of ABLE accounts on SSI benefits.
So ABLE accounts, you want to keep your balance at a hundred thousand or lower because SSI benefits can be impacted once you go over that limit and you want to check state by state. It can differ depending on states, in terms of where that benefit threshold is.
SSDI, however, there is no need to keep it below a hundred thousand, because it’s not gonna affect SSDI. So you can have an individual that has $300,000 in an ABLE account, and it’s not gonna affect their SSDI. And I know I’m throwing around some abbreviations here, but SSI is a disability where you didn’t have any earned credits before you got it.
So a child that’s born with a disability that enables them to qualify for Social Security disability, they’re gonna get a smaller benefit amount than somebody who maybe, you know, worked for 10 years and had Social Security credits and then had a triggering event that led to the disability. Another thing just stream of consciousness a little bit with this topic is the movement to age 46.
That’s very exciting because I think of specifically people that I have not been able to help as fully as I wanted to help. Knowing the benefits of an ABLE account, but knowing their disability did not occur before age 26 has limited their use of that or not allowed them to use it until next year, they will be able to.
So, you know I can think of a couple of cases where I’ve had people that had traumatic brain injuries that occurred after age 26 that have ongoing issues in their lives, that this is gonna be a nice vehicle for them going into 2026 to be able to use.
WC: Yeah. That’s all really helpful. Thanks Steve.
I also feel like I should mention, thank you for the shout out to American Funds, but that’s, there’s no kickback. There’s no, you scratch my back, I scratch yours kind of thing going here. So that’s, it’s not a prerequisite to come on this podcast to be invested.
SN: Um, and I realize that, it is just, frankly, my roots as I mentioned are in investments and, I built a successful financial planning practice before I ever focused on special needs planning and to me it’s compelling to think about the accumulation value that you can build up in an ABLE account. And it just so happens that the American Funds is more purely investment focused than some of the other options.
But, yeah, I don’t use you guys exclusively. Sorry.
WC: Yeah.
That’s okay. Okay, so Steve, as we’re wrapping up, leave us with some specific action items. What’s your advice to someone who’s listening to this episode who feels inspired? They believe special needs planning is important. They want to incorporate it, make it a bigger part of their practice. What are the next steps that you would recommend?
SN: I think, next steps for people that want to get involved with this population is to become part of it, to become integrated within it. So there are a variety of nonprofits that are involved in helping these communities volunteering with those nonprofits, getting known within the community I think is important.
So that would be kind of step one. The other thing I think to remember is that it really is important to remain positive in the approach that you’re gonna run across situations where you just, even though it might not be your family member that’s involved you just see the struggle that people are sometimes having to go through and staying positive and providing empathy.
I think are foremost of how the approach that you should take with this population. And I think next steps would, if I really was starting out new at this, I would be enrolling in, uh, frankly, the American College Chartered Special Needs Planning designation. It’s the only designation currently that focuses on this topic.
I will also plug that the Academy of Special Needs Planners is a fantastic organization. They have an annual meeting every year that basically brings together attorneys that are focused on special needs planning along with financial advisors. In addition to that, they have a forum that I pay a lot of attention to where people that are doing this work share what they’re doing, and particularly the, you know, the forum that they have online where you can post a problem that you’re facing and you’re not quite sure what the solution is, and you get the group coming in to work together. I think you’ll find if you do focus on this, others that are focusing on it are very open on what they’re doing and how they want to help people.
And partly it’s because there’s a big demand. So I think there’s a big opportunity here. And we want to see, as members of this community that are helping this community, you wanna see others get involved with it because it’s such a need. And then the more the merrier to provide solutions.
WC: That’s what I’m hearing and taking away from this, Steve, is that there really is an opportunity, not just a business and market opportunity, there certainly is that for our listeners, but a whole community that is well, historically underserved, when it comes to financial planning and in many other ways.
Steve, thank you so much for joining us today on the PracticeLab podcast. Really, really appreciate your time.
SN: Oh, and thank you. Again, it’s my honor to talk about this topic. It’s something I hold near and dear. So, I would welcome anyone who happens to hear the podcast, if they would have questions for me specifically, that they wanna reach out to me, um, they’re more than welcome to do that, and I would welcome those inquiries.
So I thank you for listening.
WC: Thanks Steve.
Shaun: Well, that’s it for this episode.
If you have any questions about ABLE accounts, please reach out to us. As Stephen mentioned, Capital Group offers an ABLE account called ABLEAmerica. It’s the only advisor-offered ABLE savings account.
Don’t forget to subscribe to the PracticeLab podcast and share this episode with other people who might find it useful. Thanks so much for listening.
SN:In this episode, Steve mentioned a few terms we need to define. SSI refers to Supplementary Security Income. SSDI refers to Social Security Disability Insurance. “SNAP benefits” refers to the Supplemental Nutrition Assistance Program. “HUD benefits” refers to the U.S. Department of Housing and Urban Development.
