Parents of Children with Special Needs Turn to Physicians - Rather Than Financial Professionals - for Financial Advice; Parents Say Financial Information is Out of Reach, According to New MetLife Study

Business Wire, April 11, 2005

NEW YORK -- Parents often overlook the financial security of their children with special needs, according to a major new study released today that is based on a survey by MetLife's Division of Estate Planning for Special Kids -- MetDESK(R). Most of the 1,718 parents surveyed for the report, The Torn Security Blanket: Children With Special Needs and the Planning Gap, say that some information is so difficult to obtain that many of them (85%) seek advice from their doctors.

Children with special needs, who are physically, mentally or developmentally disabled, often require lifelong guardianship, legal letters of intent, lifetime financial assistance and special needs trusts to preserve government benefits eligibility. These issues are important in view of longer life expectancy, in some cases, and a lifelong dependence on advanced and expensive medical care. The need to address these long-term financial challenges is urgent and widespread. The U.S. Census Bureau estimates that more than one in 10 Americans between the ages of 16 and 64 suffers from some form of physical, mental or emotional impairment.

According to the study, conducted for MetDESK by NOP World, 29% of parents surveyed, say they have taken no action whatsoever - not even the basics - to make future financial plans for their special needs children. The level of inaction is surprising given the fact that 27% of those parents expect their child will be a lifelong financial dependent.

Sixty percent of parents do not expect their children with special needs to ever be financially independent. Yet, despite recognizing that they are likely to die before their children, two-thirds (68%) of parents have not written a will, and nearly one-third (29%) have done nothing at all to plan for their children's financial future. The problem is not a lack of desire to do what is right for their offspring - instead; it's attributed to a special needs information shortfall. This lack of knowledge is widespread. Two-thirds (66%) say there is very little financial planning information that is focused on the needs of this fragile population and 63% say what exists is difficult to access.

The Torn Security Blanket: Children with Special Needs and the Planning Gap, further reveals the following:

--53% have not identified a guardian for their child in the event of their death

--72% have not identified a trustee to administer the child's finances

--84% have not written a letter of intent outlining an agreement or arrangement for the future care of their child with special needs and,

--88% have not set up a special needs trust to preserve eligibility for certain government benefits, such as Medicaid and Supplemental Social Security.

A professionally established special needs trust is important so that a well-intentioned bequest from a relative doesn't trigger a $2,000 federal limit on assets held by the child with special needs, thus rendering the child ineligible for important government benefits.

"Parents want a financial security blanket for their children with special needs," says MetLife Vice President and MetDESK Founder, Nadine O Vogel, the mother of two children with special needs. "Parents face a planning gap because they cannot find the information they need, don't have the time to look and are unprepared financially," says Vogel.

According to the MetDESK study, 32% spend more than 40 hours per week, the rough equivalent of a second fulltime job, just caring for their child with special needs. And on average, parents spend $326 per month, or $3,912 per year for out-of-pocket medical care.

The time and money needed to care for children with special needs enormously complicates parents' ability to make long-term financial plans. According to the survey:

--60% of parents with children with special needs expect their children to be financially dependent throughout his or her life - and long after the parents are gone

--80% percent of parents are concerned or very concerned about providing a good quality of life for their children with special needs if something happens to them

"Advances in technology have solved many of the medical problems for children with special needs" says Vogel. "But the downside of improved quality of life is vastly increased financial burdens and fiscal complexities. As a result, parents have been reluctant or too burdened to address these needs," Vogel added.

The Torn Security Blanket: Children With Special Needs and the Planning Gap, the new study sponsored by MetLife's Division of Estate Planning for Special Kids (MetDESK) was conducted by NOP World, a well-known consumer research company. Almost 60,000 panelists responded to a screening interview, with close to 5,500 self-identifying as a parent of a child with special needs. A total of 1,718 agreed to participate in the survey, a 31% response rate. Interviewing was completed in early January 2005. The survey has a /-2 % margin of error at a 95% confidence level.

About MetDESK

MetDESK(R), MetLife's Division of Estate Planning for Special Kids launched in 1998, is one of the first programs of its kind in the financial industry, and is a program that focuses on the concerns of families with children or dependents with special needs. For more information about MetDESK, please call 1-877-MetDESK (1-877-638- 3375) or visit www.metlife.com/desk.>