Personal finances supplement government support
Thursday January 26, 2012 — Deb Bartlett
People are taking a page from the PLAN (Planned Lifetime Advocacy Network) book and are looking at using their own resources to make sure their loved ones who have a disability are looked after, says one of the Burnaby Association for Community Inclusion’s (BACI) family support service workers.
PLAN was founded about 20 years ago by a number of professional parents who wanted to ensure their children were well taken care of.
Carol Stinson says parents used the system that was in place with the government, but wanted to supplement that with the family’s own resources, to ensure the future well-being of their children.
“There was concern back then that there wasn’t a guarantee,” says Carol.
She says members weren’t paranoid, but were very realistic about “what we can expect from formalized services like government programs. I think a lot of people are starting to catch up with that.”
Parents now have options that weren’t around 20 or 30 years ago, says Carol.
And she finds more people are taking the time to learn “tips and tricks” to ensure their loves one’s financial stability.
For example, Carol says families who have registered retirement savings plans (RRSPs) can have it roll over directly to a registered disability savings plan (RDSP) at death.
The RRSP becomes a liability the year of death, because it’s counted as income.
“What looks like a nest egg becomes a tax liability,” says Carol.
But a new change allows the investment to roll over to an RDSP “so instead of losing half of it to taxes, it can go to a person with a disability.”
As a family support service worker, part of Carol’s job is to be aware of these types of rules and how they can best benefit families supported by BACI.
For example, life insurance money that is paid out to a person who has a disability “will almost certainly disqualify them from persons with a disability income,” says Carol.
“It has to go directly from the estate into a trust,” she says. “Once it goes into your hands, you lose your eligibility.”
Carol urges parents and siblings to learn about and deal with financial issues to ensure they’re prepared ahead of time.
“You don’t want to be a burden after you’re gone,” she says.
For more information on an upcoming financial planning workshop, click here.
To comment on this story, or to share your family’s financial planning strategy or success story, contact Deb at 800-294-0051, ext. 30, or e-mail deb(at)axiomnews.ca.