Financial strategies look different for families navigating ongoing mental health challenges. The costs of treatment, therapy, medications, or residential programs can be overwhelming — and the uncertainty about the future can make it even harder to prepare. Having faced these struggles myself, I know how important it is to build structures that bring stability, preserve resources, and protect both parents and children for the long term.
Many parents face immediate out-of-pocket costs. I help identify strategies to:
Use cash value loans or flexible investment accounts for urgent treatment bills.
Track medical expenses that may qualify for the 7.5% IRS deduction, freeing cash for other needs.
Maximize HSA/FSA contributions where available, saving families 20–30% on care through pre-tax dollars.
Coordinate withdrawals from brokerage or retirement accounts in the least tax-damaging way.
Build emergency reserves (such as cash value or annuity riders) that can be tapped quickly if relapse leads to a sudden spike in care costs.
Government programs like SSI and Medicaid can provide critical support — but eligibility is fragile. I help parents structure assets to preserve benefits while still building future security:
Special Needs Trusts (Third-Party or Pooled): Ensuring life insurance and annuities fund care without jeopardizing eligibility.
Annuities structured to pay a trust, not the child: Creating predictable income streams for housing, therapy, or long-term support.
Beneficiary coordination: Making sure inheritances don’t disqualify benefits.
ABLE Accounts: Where eligible, funding tax-deferred accounts for qualified expenses.
Flexible trust provisions: Allowing distributions to shift depending on the child’s stability — tighter oversight during relapses, more freedom during periods of independence.
Families often need a balance between protection and access:
Survivorship Life Insurance: A cost-efficient way for parents to leave a pool of funds earmarked for lifelong care.
It's available as whole life, universal life or variable universal life - covers two people and provides payment of the proceeds when the second insured individual dies. Survivorship life insurance is often used to help meet estate planning or business continuation goals.
The policy will terminate if at any time the cash surrender value is insufficient to pay the monthly deductions. This can happen due to insufficient premium payments, if loans or withdrawals are made, or if current interest rates or changes fluctuate.
Variable Universal Life (VUL): Variable universal life Insurance combines the premium and death benefit flexibility of a universal life policy with investment opportunities. You may allocate your premium among a variety of among a variety of professionally managed investment divisions plus a fixed account. Of course, with investment opportunities comes risks along with the potential for reward.
These products are offered by prospectus through NYLIFE Securities LLC (member FINRA/SIPC), and a Licensed Insurance Agency and a New York Life Company.
Layered Coverage: Combining term, permanent, and survivorship policies for affordability and flexibility.
Two-Bucket Structures: Dividing assets into “today’s bucket” (for immediate treatment or relapse costs) and “tomorrow’s bucket” (for long-term stability).
Every family’s situation is unique, but common needs include:
Trust-Funded Annuities: Life insurance proceeds funneled into a trust that immediately buys an annuity, creating lifetime “paychecks” for the child.
Caregiver Compensation Solutions: Structuring policies so a sibling or relative stepping in as caregiver is financially supported.
Sibling Equalization: Ensuring inheritance is fair — one policy or annuity can go to a trust for the child in need, while another supports siblings directly.
Repurposed College Strategies: Redirecting 529 funds if a child cannot attend college due to health challenges. Options include changing the beneficiary, rolling funds into a Roth IRA, or penalty-free withdrawals in cases of disability.
Relapse-Responsive Reserves: Dedicated accounts or policy riders set aside exclusively for treatment costs if relapse occurs.
Legacy Alignment: Blending charitable giving with family strategies — leaving part of an estate to both children and mental health nonprofits.
The hardest part of mental health strategies is the uncertainty. Will your child become independent, or need support for life? I help parents prepare for every outcome:
Best Case: The child gains independence, uses repurposed savings (like Roth IRA rollovers from 529s), and grows into self-sufficiency with financial backing.
Worst Case: The child requires lifelong housing, treatment, or supervision. Structures like survivorship coverage, special needs trusts, and annuity ladders ensure funding, preserve benefits, and protect siblings from resentment.
Relapse Scenarios: Families are prepared with reserves and funding hierarchies so relapse-driven costs don’t derail retirement or deplete savings.
Middle Ground: Flexible designs — trusts with discretionary powers, layered coverage, and investment accounts — that adjust as needs change.
When treatment needs arise suddenly, most families don’t have years of preparing behind them — they have weeks or months. In these situations, the right moves in the first 90 days can make the difference between preserving long-term security and draining retirement accounts unnecessarily.
I guide parents through creative, tax-smart strategies to free up cash quickly while protecting the foundation of their wealth:
Liquidity Sequencing: Instead of defaulting to one account, we layer resources in the least damaging order — cash reserves first, then brokerage, then retirement only when coordinated with tax deductions. This prevents the “IRA wipe-out” that too many families experience.
401(k) Loan Access: For families with workplace plans, borrowing up to $50,000 from a 401(k) can provide immediate funding without triggering taxes or penalties. It’s repaid over time, allowing the retirement plan to remain largely intact.
HSA Acceleration: Even if parents don’t have an HSA today, they can often open and fund one mid-year if eligible. Contributions lower taxable income immediately, and withdrawals for qualified treatment are tax-free — creating instant savings.
Securities-Backed Lines of Credit (SBLOCs): For families with a taxable portfolio, an SBLOC allows quick borrowing against investments without forcing a sale in a down market. It’s a flexible bridge strategy, best paired with a repayment plan once life stabilizes.
HELOC or Home Equity Loans: Using housing equity strategically can unlock funding at relatively low interest rates. When structured properly (and sometimes deductible if used for medical care), this can preserve retirement balances while meeting urgent bills.
Cash Flow Reallocation: Temporarily pausing 401(k)/403(b) contributions or redirecting payroll deferrals into treatment costs creates immediate breathing room without dismantling long-term plans.
Medical Expense Bunching: Because medical costs above 7.5% of AGI are deductible, we time withdrawals and payments to fall in the same tax year, reducing taxable income and offsetting some of the expense.
Emergency Reserve Protection: Even in crisis, I help parents preserve a minimum cash cushion. Too many families drain every account and end up vulnerable to the next emergency.
For families who want to plan beyond the basics, advanced strategies may include:
Two-Track Estate Plans: Trusts with contingent provisions depending on whether the child gains independence or remains dependent.
Survivorship + Annuity Ladder: Policies that fund annuities with staggered payouts, providing reliable income across different life stages.
Sibling Equalization Strategies: Separate policies or split beneficiaries to ensure fairness across all children.
Sibling Compensation Funds: A portion of annuity or policy payouts reserved to support caregiving siblings.
Tax-Efficient Withdrawal Coordination: Using the right order — HSAs, brokerage, VUL loans, retirement — to minimize taxes when covering costs.
Professional Trustee Integration: Appointing independent oversight so funds are distributed responsibly without family conflict.
Charitable Remainder Trusts: Creating family income while leaving a legacy gift to mental health nonprofits.
Preparing isn’t just about the child — it’s also about parents protecting themselves:
Retirement and Investment Strategies: Helping parents protect their future while still managing the extraordinary costs of care.
My role is not to replace doctors, therapists, or attorneys. Instead, I:
Help families free up cash flow and avoid costly mistakes.
Structure policies and investments so money is protected and used wisely.
Coordinate benefits and private funding so families get the most out of every dollar.
Provide strategies for both today’s urgent needs and tomorrow’s uncertainties.
Continue growth of their accounts for their retirement.