Future Financial Planning for People with Disabilities – Part 2

A prior Independent Life article (Part 1) summarizes key elements of a new National Study (Study) titled “Future Financial Planning for People with Disabilities,” conducted by the National Leadership Consortium on Developmental Disabilities (NLCDD) at the University of Delaware and is available on its website. Part 1 includes a “Correction at the end of the article which was added following its original publication.

Summary of the Project

The purpose of the NLCDD project was to study future financial planning for people with disabilities and develop a framework of best practices and recommendations. Launched in June of 2020, the project consisted of three phases of data collection: 1) interviews; 2) a national survey; and 3) expert workshops.

Defining “Future Financial Planning” and “Disability

For purposes of the project:

“Future financial planning” was broadly defined as: “taking steps to make sure you have the money and services you need in the future.” One of the expert recommendations within the Study is the need to establish a common definition for future financial planning.

“‘Disability’ [was] self-identified and categorized as one of the following: intellectual or cognitive disability, developmental disability, physical disability, autism or ASD, mental illness or psychiatric diagnosis, deaf or hard of hearing, blind or low vision related disability, brain injury, learning disability (e.g., ADHD, dyslexia, etc.), sensory disability, or chronic illness. Participants were also able to select “other” and write in their own disability. The definition of disability and opportunity to self-identify align with definitions and methods of the American Community Survey.”

Personal Injury Disabilities

Although the Study and the survey included persons who were disabled as a result of personal injuries, the survey did not attempt to separately identify or differentiate disabled persons who were personally injured or to determine whether they received compensation from a settlement or judgment.

As a result, survey participants who were disabled as a result of a personal injury (whether or not they received compensation from a settlement or judgment) and persons who were developmentally disabled appear to have otherwise been considered as equals for purposes of this Study of future financial planning.

In the context of future financial planning, as well as for some of the findings and observations in the Study, however, these two categories of people with disabilities should not be considered as equals. In fact, separate and distinct financial markets exist for persons who are developmentally disabled and persons whose disability results from a personal injury and who receive a settlement or judgment. The financial advisors and some of the financial products are also different.

Omitting NSSTA and AASC

Cory Gilden, one of the Stetson presenters and Primary Investigators of the Study, has informed this writer that that the final, slightly revised version of the study will mention personal injury lawsuits and the specialized training offered by the Society of Settlement Planners (SSP) and the Academy of Special Needs Planners (ASNP).

This writer is a member of both SSP and ASNP, as well the National Structured Settlement Trade Association (NSSTA) and the American Association of Settlement Consultants (AASC), two other national associations whose members offer structured settlement annuities, as well as other financial products and services, to disabled persons who receive personal injury settlements.

Although AASC is relatively newly formed, NSSTA was formed in 1985. NSSTA is also one of the largest contributors to the American Association for People with Disabilities (AAPD). Eric Vaughn, NSSTA’s Executive Director, is a member of AAPD’s Board of Directors. Yet, neither NSSTA nor AASC are mentioned in the Study; nor apparently were any of their named representatives directly involved as “experts.”

Purpose of this Article

This Part 2 article focuses on the NLCDD Study as currently published including the anticipated amendment that may mention personal injury lawsuits but is not expected to change any of the Survey findings or Study recommendations.

The specific purpose here is to identify, in an otherwise outstanding Study, certain Survey findings that are not, or may not be, applicable to persons with disabilities who receive personal injury settlements. The more general purpose is to encourage further dialogue about these issues.

Part 3 will discuss Study recommendations that could benefit structured settlement and settlement planning professionals – especially those that challenge existing assumptions and/or practices.

Personal Physical Injuries

Let’s begin by identifying the primary differences, from a future financial planning perspective, between a person with disabilities who is, and who is not, compensated with a settlement or judgment for personal physical injuries.

The most obvious difference, of course, is money. Unlike most persons with developmental disabilities, many persons with physical, personal injury disabilities have legal rights of recovery by which they can be compensated, at least in part, for disabilities related to their injuries. They have a source of funds unavailable to most persons with development disabilities.

In addition, these persons with disabilities who are so compensated can benefit (directly or indirectly) from various sections of the Internal Revenue Code that are critical to their future financial planning but which are inapplicable to persons with developmental disabilities. These include: IRC Sections 104(a)(2); 130; 468B; and 5891.

Impact on Survey Findings

Now let’s consider how these differences impact some of the Study’s Survey findings and related observations.

Survey Questions

The Study’s Survey questions are discussed but not specifically identified on Page 44 of the Study’s Appendix B where it states: “[d]epending on the track chosen and the answers given, participants could be prompted to answer as many as 57 questions, but most answered far fewer.”

In summary: “The survey asked participants about demographic information, their experience with future financial planning accounts, financial literacy training, point of entry for future financial planning, challenges, and facilitators to obtaining and maintaining accounts, and their values related to people with disabilities regarding choice and control over planning and spending.”

The Study itself does not mention any questions asking about “disabilities resulting from personal injuries or work-related injuries or any compensation related thereto.” How large is that population and how important is that population to any study on future financial planning for persons with disabilities?

As one indirect measure, based upon studies by Towers Watson, this author has estimated that, excluding mass tort, workers compensation and property cases, plaintiff attorneys and their clients receive more than $172 billion of tort settlements per year. In other words, we can assume a meaningful percentage of disabilities result from compensated personal injuries.

Types of Accounts

The Study’s analysis of 5252 survey respondents consisted of self-identified people with disabilities; family members or guardians; disability professionals; and other professionals.

The Study identified and discussed the following types of financial accounts: 1) first-party and third-party special needs trusts; 2) pooled trusts; 3) ABLE accounts; 4) savings accounts.

Significant for persons who are disabled and receive personal injury settlements, the Study did not mention structured settlement annuities.

Although not all structured settlement recipients are disabled, more than $180 billion of structured settlement annuity premium has been written in the United States since 1975.

Also, under current law, “direct payment” of structured settlement annuities into an ABLE account could disqualify ABLE beneficiaries from receiving SSI, Medicaid and other means-tested public benefits.

For that reason, several national associations are currently considering a legislative solution for the “direct payment” structured settlement issue to benefit qualifying individuals with disabilities who receive physical personal injury settlements.

For persons who are disabled and receive personal injury settlements, therefore, account options are different than for persons who developmentally disabled.

Barriers to Future Financial Planning

The Study provides a detailed and valuable analysis of barriers to future financial planning experienced by people with disabilities, their families, and professionals beginning on page 17. Because the Study does not differentiate, or specifically address, personal injury disabilities, some of its observations, findings and priorities do not seem applicable.

For one example, the Study points out the importance of knowing how, when and where people begin the future financial planning process. The answers might still be diversified (though more time compressed) for most persons with disabilities who receive personal injury settlements.

Consider, for example, SSP’s Settlement Planning Practice Standards , which specifically address “how and when” and arguably represent industry “Best Practices” but are not mentioned in the Study.

For another example, the Study’s focus related to barriers to future financial planning focuses on “having a future account or saving plan.” The number one reason identified by Survey participants who self-identified as “disabled” was “don’t have enough money.”

The Study reinforces this issue on page 5 stating: “People with disabilities and their families experience higher rates poverty and/or often struggle to make ends meet.”

Certainly it is possible that an impoverished financial status continues to characterize persons with disabilities who receive income tax free settlements. More often their barriers to future financial planning include concerns not mentioned in the Study: 1) dissipation of lump sum settlements; and/or 2) factoring of structured settlement annuities.

Related to the lump sum settlement settlement dissipation concern, the Study notes on page 20: “People with disabilities also found strong social support from their families and friends to be helpful in future financial planning…”

That statement may be true for persons with developmental disabilities. As many plaintiff attorneys will attest, however, dissipation of lump sum settlements frequently results when people with disabilities “loan” money to relatives or friends.


The purpose of this Part 2 article is to not to disparage the NCLDD Study of “Future Financial Planning for People with Disabilities” or to suggest it has no relevance or value for structured settlement and settlement planning professionals. To the contrary, the Study represents an impressive research and analytic accomplishment.

The Study apparently did include persons with personal injury related disabilities as well as developmental disabilities within its Survey. However, as this article has attempted to point out, the Study’s findings did not attempt to identify or address any of the important differences.

Part 3 of this series will discuss why some of the Study’s findings and almost all of its recommendations are nonetheless relevant and worth considering by members of the professional structured settlement and settlement planning communities.