When your adult son or daughter is diagnosed with a serious mental illness, everything changes. Suddenly, all of your financial planning is thrown into turmoil as you’re focus turns from your needs to the immediate and long term care of your child. The cost of diagnosis and treatments can derail your retirement unless you develop a financial strategy that provides for your child’s future while safeguarding your own.
That’s what Allen Giese, author of When Mental Illness Strikes, is going to talk with us about. Allen is the founder of Northstar Financial Planners and he’s also the father of an adult son who was diagnosed with schizophrenia in his late teens.
Allen and his wife are both deeply involved in mental health advocacy. He has been where you are. And in this episode, he’s going to give you his advice and solutions on how to invest efficiently, how to apply for and keep government benefits even if you’re resistant to that idea. How to build a real systemic financial plan for your family, how to avoid crucial mistakes, and a whole lot more. When mental illness strikes, you don’t have to sacrifice your financial security. This episode could be your lifeline to the best possible future for yourself and your children.
Allen Giese: In my son’s case, there was one night that was pivotal that we knew we were in serious trouble. We had been invited to my business partner’s mother’s home to help them celebrate Yom Kippur, to break the fast. It was a big event ,and we understood that this was an important event. My wife and my two kids and piled in the car and drove half hour north to their house and my son was—he was agitated. He hadn’t been right for a little while.
He had been very agitated and stressed about things.
On that car ride up there, he became more and more agitated, and by the time we got there, he was really having a hard time, he couldn’t sit still, he kept having to leave the house, go outside, walk around, he’d come in. We were keeping an eye on him and realized he’s really uncomfortable and something’s wrong here. We left early and drove back down to our house. By the time we had gotten home, reality had basically left him.
“It was such an emotionally charged event that I only remember scenes from the night but not the whole thing pieced together.”
It was so strange, where he was frantically pacing around our backyard pool area, I thought he was going to explode. He had so much tension in his body and at the time I thought he was like yelling at the pool.
This went on for hour, and we realized there’s something seriously wrong here. That was kind of the pivotal night. We didn’t know at the time it was a disease, but whatever it was, it was coming to a head and boiling over.
That’s when we sort of put in the super charge to focus on finding out what this problem was. Eventually, we learned our son had a serious mental illness.
When Mental Illness Strikes
Charlie Hoehn: Wow. Thank you for sharing that Allen. I’m excited to talk about your book, When Mental Illness Strikes because you talk about the unique position that families are put in and I just want to dive right in. Tell me first off, why did you decide to write this book? Why did you feel this book was necessary?
Allen Giese: Well, it was a thing that progressed over years and at that early part of his illness, we were desperate and we basically grabbed at every straw that was put in front of us to try and solve this problem—we were looking for that pill or that shot. Whatever it was that would cure him.
We had one example where we heard about a doctor up in Vancouver who specialized in kids his age—he was 18 at the time—with vast amounts of vitamins.
It was a vitamin regimen and literally a handful of vitamins three times a day, very focused on certain types of vitamins. We flew to Vancouver like at the drop of a hat because we were that desperate. You know, obviously, the things that we were trying weren’t working at the time.
Charlie Hoehn: How many things had you tried at that time would you say? Just to give a picture of how desperate you were to solve the problem?
Allen Giese: Yeah, we had tried, I don’t know how many, I’d say dozens of different psychiatrist and psychologists. No discredit to them, because the disease was still manifesting—it’s not like one day, you’re not ill, the next you’re suddenly, have a serious mental illness.
“It takes years for these things to develop.”
It was quite some time until one of the psychologist called us up late one evening and said, you know, I think he’s schizotypal. I think he has some schizophrenia type symptoms here. That’s where the path into schizophrenia really started.
We went up to Vancouver grasping at that straw, and I remember as soon as she said, “Well, he has to go off all dairy,” I knew it was destined to fail. How do you take an 18 year old and say you can never have pizza? It ain’t going to happen.
It’s a tough disease.
Charlie Hoehn: He was taking vitamins three times a day. A bunch of vitamins?
Allen Giese: We tried it but it just didn’t work, yeah.
Charlie Hoehn: Yeah, of course.
Allen Giese: One of the problems, especially with schizophrenia, I think with most serious mental illness is that the person who is sick really doesn’t realize or know or feel that they are sick. Why are we doing all of this? It’s the question. Taking a handful of vitamins just didn’t seem like a good idea to him.
Charlie Hoehn: Yeah, tell me about the position you were put in from a financial perspective because that’s what part one of your book is about, is the financial concerns and the challenges that are faced by parents. How bad did things get?
Allen Giese: If you looked at that Vancouver trip for example, it cost us thousands of dollars. We were very fortunate that we were able to afford that. Many families aren’t. And that’s just one example.
All of the psychology appointments with therapists and psychiatry appointments, once you’ve passed the maximum that your health plan will pay out…
“There’s a whole lot out-of-pocket that you’re dealing with.”
It got expensive, and then as we sort of became immersed into the mental illness community and talking to other parents, I started realizing that, wow, a lot of people are really getting messed up financially.
On one hand, it’s like you can’t fault them for it, of course. They’ll do anything to try and figure out how to make my kid better.
But on the other hand, you know, if it was just some sort of plan or if there was somebody that they could have talked to that had some empathy that had some understanding of how financial instruments worked.
I ended up doing a study. I picked out 15 different families that I had met and had heard about and approached them and said, listen, I’d like to just ask you what are your biggest concerns and how could a financial planner have helped you if they’d stepped in at the right time?
Just learned so much from these people and also learned that my experience was not unique. Everybody is laying out a whole lot of money and doesn’t really understand all the rules and the tools that are available to them.
I thought, well, this book could really help.
Important Benefits to Take
Charlie Hoehn: Talk to me about some of those concerns, what were the things that you commonly heard?
Allen Giese: Probably the most common thing and we fell into this ourselves is social security. You know, the idea of applying for SSI or you know, social security benefits for my son wasn’t even on our radar. I think yeah, my wife was in a family support group and the leader of the group said, “You need to apply for SSI.”
She was stunned, she was like, “Really?” She didn’t realize there was such a thing that he would qualify for. We went online and got the paperwork and put all the things together that they asked us to and when the social security office. Sure enough, at that point, he had a diagnosis so he was eligible for SSI.
“We see now in retrospect how valuable that was.”
It wasn’t just the money that our son received every month but it was the fact that he now qualified for SSI which made him eligible for Medicaid. Today, he’s in a program that is funded by Medicaid, and had we not applied, he wouldn’t be eligible for hits program.
Also, there are instruments out there that you need to have a diagnosis before a certain age and apply for an SSI application before the age of, I think it’s 26. Don’t quote me on that one, but I think it’s 26 to be qualified for an able account.
Applying for the government benefits was something that we just had to get over. It’s important. You have to do it. I think a lot of people, especially the more affluent just sort of look at it as a hand out. And it’s not a hand out.
Charlie Hoehn: They feel guilt wrapped around it?
Allen Giese: Exactly, it’s almost like there’s a stigma there, you know?
Other Financial Safety Nets
Charlie Hoehn: Let’s break down the before, after—or what your financial life would have been like had you not done the things that you laid out in your book versus what it is now. Can you give that clear contrast?
Allen Giese: A lot of the book focuses on just doing the things that are available to you. For example, we just talked about SSI and applying for Medicaid. Without that then we’d still be paying out of pocket for very expensive therapy appointments. He wouldn’t even be in the current program that he’s in for treatment. That’s extremely valuable understanding the government benefits that are available to you.
On the other side, the non-government side, it’s understanding the tools that are out there. Like I mentioned the able accounts. Able accounts allow a person who is disabled, who is on SSI for example, to still qualify or to still receive their monthly benefit and save money at the same time. If you save money in just the savings account at the bank and that account balance went above $2,000, you would lose your SSI benefits.
An able account allows you to save up to $100,000 in your name and not lose those very valuable benefits.
The money that’s in the able account can then be used to supplement the lifestyle, the quality of life for the disabled person without putting their government benefits in jeopardy.
“That’s a tool that very few people really understand.”
They don’t even know what’s out there because it was so recently legislated. It was only legislated in 2014 and it really takes a couple of years for the financial industry to catch up with programs and products that you know, can be utilized.
After that, we obviously wouldn’t have a special needs trust if we didn’t need that in our lives and it allows relatives for example who may be designating our son as a beneficiary to again, not destroy the potential of his government benefits but you know, putting that money into a special needs trust instead.
Yeah, there’s a number of different financial planning tools that agood financial planner who understands this space is going to steer you toward.
Changing Retirement Plans
Charlie Hoehn: It should be an obvious disclaimer, this is not a guarantee, right? This is not a specific amount that you’re going to save or anything but just to put it in broad terms of what parents like yourself, having implemented the strategies and tools in your book, what can they expect in both their financial and emotional lives?
Allen Giese: That’s a good question, and you’re right, Charlie. It’s really hard to put any sort of a number on that. We spend a great deal of effort in the book talking about how important it is to have a higher level of efficiency in your financial plan when you’re dealing with a family member who has a serious mental illness.
Because what really hit my wife and I was that, one day, we realized that we’re not planning for our retirement anymore.
“We’re planning for our retirement plus our son’s life expectancy.”
Which hopefully is after we’re gone. That’s kind of like our retirement plus another retirement on top of that.
To do that, we realized we really just can’t afford to make mistakes is. We have to make sure that we’re capturing the global capital market rate of return as efficient as possible. So we talk about that in the book, and how does the academic world, not the Wall Street world, but how does the academic community talk about or suggest you build your investment portfolio to capture the global capital market rate return in the most efficient manner and the lowest cost manner.
Because if there was any place that I can think of in financial planning that you can’t afford waste, this is it.
We spent a lot of time talking about making sure that, you know, your investment portfolio is highly diversified and very low cost. So what’s that worth? Is it worth 1 or 2%? I think it probably is, but like I said, you certainly can’t guarantee that. It might be worth more, it might be worth less.
More Than Return
Allen Giese: After doing this for so many years, we’ve always been evidence based investors. Our investment firm has always been focused on what the academic community talks about, not necessarily with the Wall Street community talks about. The Wall Street community, really they want to sell their stuff, you know?
The academic community, they just want to know how it works. We get a different story from them than we do from the Wall Street crowd and so we build our portfolios based on what the academic people are saying. You know, it’s a more efficient method of investing.
Charlie Hoehn: Would you mind going into it just a little bit? I don’t want to get too far down the rabbit hole but what do the academic say generally apart from diversify and diversify?
Allen Giese: Yeah, sort of the next biggest thing that they’ll be talking about is the difference between passive investing and active investing. With passive investors, basically, the objective is, let’s just buy the whole market and sit back and do something more interesting than investing. We own the whole market, we’re going to get the whole market return. We’re not going to try and guess which stocks are going to be better than other stocks or which bonds are going to outperform other bonds, we’re just going to own them all.
In essence, that’s how we’re going to capture the global capital market rate of return.
Now, we focus our efforts on, if we’re going to buy portfolios that contain for example, all of the US publicly traded stocks in them, who is doing that out there at the lowest possible cost? Because that’s the guy that’s in the end is going to have the highest net return.
And so its cost becomes huge. It becomes a really important factor. So another thing that we’ll focus in on is what areas or dimensions in the market are there that have higher expected returns than other dimensions in the market? So for example, smaller companies we know historically have proven themselves to be higher returners than larger companies. So I just give them enough time, and it seems to happen.
The same is true with companies that are what we consider value companies. Companies that are typically lower priced and maybe their balance sheets aren’t looking as good, but as a group, they tend to do better going forward over big chunks of time, like a decade or something, than companies who are at the top of the market right now with the higher prices.
More Than Just Finances
Charlie Hoehn: You have a chapter in the book called “Taking Care of the Parent.” Tell me about that.
Allen Giese: Really glad you mentioned that, because that is a chapter that both my wife and I felt like we had to have in the book. If you are not taking care of yourself, you are not going to be able to take care of your son or your daughter.
You need to figure out, for example, how to get away. How to get some rest a bit, how to still enjoy your life. So many people we’ve talked to don’t. They’re bound. So for us, we realized it was making sure that we maintained a strong network of friends.
We do it a lot through our faith community, but you don’t have to.
“Wherever you can build a strong community that understands.”
For example, we were at a workshop last week out in Denver, and my wife and I both went. We had three days, and we left our son home by himself. However we had people dropping in regularly to make sure he’s okay and see if he needs anything, and he’s doing fairly well recently, so we felt a little more comfortable at least leaving him home.
But if we hadn’t had that network popping in on him and reporting back to us, I know my wife wouldn’t be able to come, she would have refused to leave him.
When we got back, of course everything was fine. There was no issues, the house was not burned down or anything, and he had a great time while we were gone.
We felt like he was a little lonely, so he was glad to see us get home, but it’s important to take care of yourself. Early in the process, we realized how stressful this was on our marriage. And my wife recognized it before I did, and she realized I was becoming more and more distant. It’s a pretty heavy thing you are dealing with.
Charlie Hoehn: Yeah and how long have you two been married when this struck, 18 years you said?
Allen Giese: When it struck, he was 18 years old…26 years, we’d been married. Yeah so we have a pretty long and healthy marriage and she knew me really, really well. She realized something is starting to go wrong here and she is the one that said, “We need to go see a marriage counselor,” I’m like, “Well, okay.”
I was getting too focused on my business and too focused at additional business that we had started at the time. It was actually a foundation for mental health awareness, and I wasn’t paying attention to the family. God bless her that she recognized that and in her way said, “We need to go see a therapist.” It was just a wonderful, awesome experience to be able to put that together with her.
Learning from When Mental Illness Strikes
Charlie Hoehn: Can you share maybe one of your favorite success stories of parents who have implemented this and gotten great results?
Allen Giese: Yeah, let’s see off the top of my head, I had one parent approach me at a National Alliance of Mental Illness fundraising walk and said, “Hey.” He knew my history, he knew I was a financial planner and he knows the history of my son.
He was going through some issues himself with his kid and really just felt lost financially. He didn’t feel like he really understand this stuff and didn’t really want to, to be honest with you.
He wanted to keep focus on his kid, so he said, “Hey could we meet?”
So he came into the office and we put him through our standard process that we do, which starts off with a pretty significant discovery. Even when we feel like we know somebody, we still spend a fair amount of time trying to make sure we understand what their most important objectives are and what their goals are. We’re able to put together a very nice financial plan for him. I’ve known him now for years and he doesn’t think about it.
“It doesn’t weigh on his mind.”
I think that is probably the biggest advantage that I see regularly from clients. The biggest benefit that they feel, is that this is not a part of their life that they stress about anymore because they know that they’re on a plan, they know where they’re going, they know what the parameters are now.
They feel like they are not missing out on opportunities or things that they should be doing but they don’t know where they are. Because they know that we’ve got that covered.
So it is kind of the same story a whole lot of times. That is pretty much the makeup of the interaction we are seeking with our clients.
Connect with Allen Giese
Charlie Hoehn: How can our listeners connect with you if they want help with this financial planning part of their lives or follow you if you have social media?
Allen Giese: Well to start with we have a website and it’s northstarplanners.com and on our website, we have a blog and newsletters and things like that under the research section. We are also on Facebook, Northstar Financial Planners and LinkedIn same thing, Northstar Financial Planners.
That is pretty much it. Of course they can always, I have an email just like everybody else does. It’s firstname.lastname@example.org just drop me a line.
Charlie Hoehn: Excellent and final question, could you give our listeners a challenge. If any parents are listening to this who have children with mental illness or it is in their family, what is one thing they can do this week from your book that would make a positive impact?
Allen Giese: I think the most positive impact especially if they are working with a financial advisor, is to make sure that their working with a financial adviser who has a fiduciary. That would be an advisor that doesn’t sell any product and they can’t sell any product and be a fiduciary. I mean you can’t sell anything at all. It has to be a pure fee only relationship. If they’re not working with a fee only planner, a really strict fee only planner, to just interview one.
“Just get a second opinion from a true fiduciary planner.”
Because it is a very different experience that they will have. The whole sales process goes away and it is now all about helping that person accomplish the most important goals that they have whether it requires a financial product or not, it doesn’t matter anymore. It’s about achieving their most important goals which for our clients.
Honestly when we break it down, it is about who is going to take care of my kid when I’m gone.
That is the ultimate question we are trying to resolve, and it’s a tough one, not always resolvable. But it is what we strive for, and a lot of times, most of the time, that doesn’t involve the sale of some financial product. It’s about setting things up properly and seeking out the right kind of relationships and building a community and all the other important things that you need to be cognizant of when you have a child with a serious mental illness.