In this heartfelt episode of Retire in Texas, Darryl Lyons, CEO and Co-Founder of PAX Financial Group, sits down with fellow PAX advisor David Alvarez to discuss a deeply personal and often overlooked financial planning topic – supporting families who have children or loved ones with disabilities.
David shares his own journey into financial services, shaped by his family’s background and a career that began at the peak of economic uncertainty. Now a key member of the PAX team, David has developed a specialized focus on serving families navigating the complex realities of long-term disability planning.
Together, Darryl and David explore:
• How David’s passion for serving families with special needs began.
• The emotional and financial toll of long-term illness or disability.
• Key planning tools like ABLE accounts and Special Needs Trusts.
• The importance of acting on important, but not always urgent, financial tasks.
• How PAX’s “Honest Conversations” methodology helps both spouses find clarity and peace of mind.
Whether it’s planning for a child with autism, preparing for future medical expenses, or simply figuring out where to start, this episode offers real-world guidance for those walking a challenging path.
If you or someone you know is navigating life with a loved one who has special needs, don’t miss this episode. And remember – you think different when you think long term.
Learn more or reach out at PAXFinancialGroup.com.
Transcript:
Darryl: Hey, this is Darryl Lyons, CEO and Co-Founder of PAX Financial Group. And you’re listening to Retire in Texas. This information is general in nature, it is not intended to provide specific investment, tax, or legal advice. Visit PAXFinancialGroup.com for more information. Thank you for tuning in today. Last week I had a guest. This week I have a guest. So, David Alvarez is here with me today. David, welcome.
David: Thank you for having me.
Darryl: I’m super excited to have you. You have a passion and a heart for this industry. How did you even get into financial services to begin with?
David: Very good question. I’ll go back a while. So, both my parents were immigrants. They escaped from communism and Castro in Cuba. And, growing up, I heard lots of stories about the system there and the corruption and the poverty and it kind of inspired me to learn about economies. And so, when I went to Northwestern University, I studied economics and history, and I knew I wanted to do something involving finance.
And it was just perfect timing with kind of the peak of the dotcom bubble. And, you know, between that and 9/11 and Enron, you know, coming out of school, I was seeing things at the time were frankly, really terrifying. But looking back now, it was a good introduction to the risks and maybe over enthusiasm.
Darryl: Yeah, it was, I mean, I think we all kind of we never forgot it.
David: So, it was a really interesting market to come into right out of school. I started with JP Morgan in New York, spent about 13 years with them before I found my way back home to San Antonio, with PAX. And it’s been. It’ll be six years next month.
Darryl: Yeah. We’re super happy to have you. You’re a light here in a lot of ways. One of the things I love is just your heart to serve. You tend to focus on families with disabilities. So, tell me where that heart came from. Is that just a natural inclination of working with clients over the years and seeing the challenges that come in certain situations?
David: Like a lot of things. It certainly wasn’t planned, about 13 years ago, a good friend of mine came up to me and let me know his daughter had a terrible medical diagnosis that was going to present them with a lot of challenges financially and obviously emotionally. And so, at the time, I had just finished my CFP, and I was thinking, all right, I’m going to dig into this.
I want to figure out what you need to be doing. And, you know, started working with him and his family, helping them prepare for their daughter’s, you know, life that’s going to be challenging. And as a result of that, you know, they introduced me to another friend who was going through a similar situation. And it’s just over the last decade or so, become something that I’m really focusing on.
In the middle of, completing a Chartered Special Needs Counselor designation. And so that’s something that will be providing an additional layer of value to our clients who face the situation because there’s a lot of them.
Darryl: You know, some people have been listening. I had challenges with my oldest and he was sick for a long time. He’s better today. That’s not the outcome of most people, though. It’s chronic. But just during that season that he was sick, which was multiple years. The pressure it puts on you, in the marriage and the family finances.
And I was just wondering, you know, when I was going through that, how, we had kind of broken through the early part of, you know, being broke in the business. And so, we had some financial resources. And I also can kind of navigate the health insurance world a little bit. But I was thinking, gosh, this is really hard to do if you’re working full time, you don’t have the money, and you can’t figure this stuff out.
It’s just overwhelming. So, I say all that because I can appreciate having somebody that just says, I’m going to walk alongside of you, but there’s a whole range of disabilities that people are challenged with, from autism to really chronic. And can you give us some examples of what you’re seeing out there in terms of families with disabilities?
David: Yeah, yeah. You hit the nail on the head. It’s a wide universe out there. You see chronic disabilities like, epilepsy or diseases like cancer that could cause someone to become fully disabled for a significant period of time. You know, if you think about it as traumatic as it is to think about a child with cancer, that is a situation where at least one, if not both parents, will not be able to work for a while, right?
They’re going to be full-time caretakers, something like that. Then on the opposite end of the spectrum, you have what we call the, you know, autism spectrum disorders, which have a wide variety of outcomes. You know, I have a 14-year-old who’s on the spectrum. We fully expect him to be able to manage his finances when he gets older.
He’s super smart. He does that. But then on that same spectrum of the autism scale, there are people who will not be able to manage their own finances, not be able to make their own, you know, financial decisions when they get older. And so, as a parent, it’s an incredible challenge. You know, obviously in our business we think about the finances, but outside of finances, right?
Darryl: There’s the emotional burden. I had a friend the other day, I texted him and I said, hey, man, I need you to get your wills done. Like you have a child that is, he can’t, at least in the current state, can’t take care of himself. And you need to get your wills done. I keep pushing him. Can you tell me? I mean, I’m chuckling only because he’s a buddy of mine. I keep pushing and pushing and pushing, and it’s just so challenging for, you know, somebody in this, you know, the circumstances with everything going on and try to break away and think about these things and get the legal framework done. But can you tell us a little bit of, we’re not attorneys, but we do walk alongside people to get this, get their stuff in order. So, tell me a little bit about your role helping people. Get their stuff in order.
David: I think the biggest challenge in those situations is that you’re constantly faced with urgent needs and the important things like getting a will done or doing your financial planning or thinking about retirement. Those are all very important things, but they’re not necessarily urgent, right?
Darryl: That’s a good point.
David: Families tend to do is they’ll tend to say, okay, yeah, I’ll put that to the side and then focus on how I get through the next day. And my job as an advisor is to really bring those long-term challenges that are not urgent to the front of their mind so that they can have a little bit of peace knowing that, you know, those long-term situations, those long-term needs are going to be taken care of. You know whether it’s introducing them to an attorney who could create a special needs trust for them, whether it’s setting up, or guiding them through the setting up of an able account, things like that.
Darryl: Can we talk about some of those things?
David: Yeah, absolutely. So, there’s on the financial side, there are a lot of resources. One of the big things that’s a challenge for families in this situation is understanding whether or not your child or your family member is going to be able to make financial decisions for themselves. Are they going to be able to hold a job, or are they going to be able to pay their bills?
Are they going to be a risk to themselves or to anyone else? And for a lot of folks, the answer is no, right. They’re not going to be able to do that. And in those situations, then it becomes important to have a plan in place, to have a will, and to set up some of these things. So, two of the things that we just discussed, the able account, if you think about in our industry, we hear a lot about the 529s, which are specifically designed for educational expenses.
Darryl: Yep.
David: Able accounts are similarly designed. But they’re more for your special needs, medical expenses. And there’s a broad range of expenses that they can help cover. The IRS released a letter in 2022 that really gives a wide range of expenses that are allowable to be covered from able accounts.
Darryl: Okay, good.
David: So able accounts are something that every state has them. And you can put funds in an able account. And the key benefit of an able account is any growth that you get in the able account is all tax free.
Darryl: Do you get a tax deduction when you put it in or no?
David: You do not, no.
Darryl: But the money, we can invest it right? Or it can be invested.
David: It can be invested. And if you know, if the investments grow, any growth you get in there it is all tax free, if the funds are used for qualified expenses. And like I said, the IRS has given a lot of leeway.
Darryl: You can set that up early. That could be really good. Can you put like 50 bucks in there?
David: In the state of Texas, you can put as little as 50 bucks. You can put as much as 19,000, which is the annual gift allowance.
Darryl: That’s a lot. Still, that’ll compound. That’ll grow. Yeah. For sure.
David: So, you have the ability to put in money. You don’t have to put in money every year.
Darryl: It’s not an obligation.
David: Yeah. And so, the able account is probably the, I would say the easiest way to start setting some money to the side so that your child has some resources. And the other key benefit in addition to the tax benefit is that, up to $100,000, the funds that are in that account are not going to impact their eligibility for SSI, which is Supplemental Security Income. So that’s something that becomes important later in life when they don’t have your income, just depend on them.
Darryl: Because SSI may be one of their primary, I don’t know who knows. But one of their big income sources, the child’s income sources down the road. And that’s a disability. That’s the disability trigger for the Social Security system. Right. Yeah. And, then you also mentioned the special needs trust, right?
David: And I would say special needs trust is something you want to set up, for more significant assets. Right. So, if you’re leaving, if you’re expecting to leave your child with an inheritance, or if they receive, let’s say that their medical condition is as a result of a car accident and they receive some sort of big medical settlement. A special needs trust is the ideal place for that because it has a higher dollar value that you can put in there without impacting their SSI limit. And also, it’s something that can, you know, continue on after they’re gone. You know, so the special needs trust I would say is for more significant assets.
Darryl: So, can you give me an idea of what significant means?
David: Yeah, I would say over $100,000 is probably where you want to look into setting up a special needs trust.
Darryl: So, if your assets are over 100,000.
David: If it looks like that child will be inheriting or receiving more than 100,000.
Darryl: Just kind of a rule of thumb.
David: Exactly.
Darryl: And so, if you don’t do that, then those assets will go into some calculator that will trigger Social Security to say that child doesn’t get disability, SSI, because you’ve got enough money to handle it on your own. Right. But if you put it in the special needs trust, does the IRS like, close their eyes to the special needs trust and say you can get, or Social Security and you do get the income.
David: You are allowed to get the income. And then the key thing that comes along with SSI is Medicaid, which, you know, obviously you have a lot of medical expenses. If you have the conditions that require physical therapy and special medications or things like that. And if you are receiving SSI, you automatically qualify for Medicaid. And so, for somebody who is booted out of SSI because they have too high of an income, then they would also be booted out of Medicaid, and they would have to go out into the private market to find health insurance.
Darryl: Yeah, some people, and I just want to make sure that I don’t confuse anyone. We don’t confuse anyone. Medicare is really what you get when you retire. Medicaid is if you’re indigent, you don’t have the money.
David: Exactly.
Darryl: And in the big beautiful bill, I know they addressed Medicaid, and as I understand it, they didn’t preclude or change the distributions for those who can’t work, those who are truly disabled. Right?
David: That’s correct.
Darryl: What they’re trying to do is hold people accountable. And again, I’m air quoting because I really don’t know, like I don’t know the heart behind it. Like the intent, you know, there’s a lot of debate on Medicaid when it comes to this big beautiful bill. But as I understand it, they’re trying to have those that claim to be disabled but aren’t to show that they’re working. So, we’ll see how that plays out. But the reality is, at least at this point, those who are disabled will still get Medicaid, as I understand it.
David: That’s correct. Yeah.
Darryl: And so, as you continue to, you know, carve out this niche where you’re serving communities with families with disabilities, you know, one of the biggest challenges that I could see you facing is just trying to encourage people to go into that important but not urgent quadrant and getting the work done. But you are able to engage the husband and wife in such a way through a process that we’ve adopted called honest conversations that really helps you hear from not just one spouse who may be more vocal, but from both spouses. So, can you tell us a little bit on how you use honest conversations to engage parents?
David: Yeah, I think in our job we tend to focus on dollar amounts and investment returns and all of that is very important. Obviously, we don’t want our clients to miss out on positive markets. And we want to make sure we provide the best investment experience for them. But what we don’t want to lose focus on is, you know, money itself is not the goal, right?
The money is a tool for our clients which will help them achieve their goals. And, you know, with honest conversations, really the focus of those talks is the goals, right. What is this money for? What do you want to be able to do yourselves? What do you want your children to be able to do? What do you want your grandchildren to be able to do if it gets to that level? But really turning the focus of the conversation away from investment returns and stock market, and bond market back to what the actual point of the money is. Because you can’t take it with you. And so, what are you going to do with it while you’re here? And what do you want it to do while you’re gone?
Darryl: And I think that’s important because families that have children who are needing more care and attention, sometimes those parents haven’t really given that thought, like, what does our future look like? And in the context of, you know, our situation and I want to encourage if anybody’s listening and is like, well, I want to talk to an advisor, I just don’t know where to start.
We have a methodology to help guide that dialog to discover what’s really important, and not from just the husband who might be a loud financial guy of the family, but from the spouse who might be timid. But her voice is very important. And I’m, you know, using gender to just generalize here. But that honest conversation has been pretty powerful if you use it, you use it a lot.
David: All the time.
Darryl: Do you ever have families cry whenever you have those.
David: A lot. Yeah, it’s incredible when you get to the root of why our clients make the financial decisions that they do, oftentimes it’s not because of the situation they’re in or, you know, because of the advice we’re giving them, it may go back to the story of, you know, when they were younger and mom and dad were, you know, between jobs for a few months and they remember how stressful that was.
And, they remember, you know, not being able to get new shoes one year and having to wear shoes that were two sizes too small. And, when those stories come out, I mean, it’s emotional. And so, you have to become comfortable to, you know, kind of sit there and, and share that. And it really is, it means a lot that our clients are willing to share those experiences with us, but it helps us as advisors to get to the root of why they make the decisions they do. And then we can provide better guidance to help them make good decisions in the future.
Darryl: And it really helps us to nudge them when they’re not taking action and reminding them, hey, remember why you’re doing this. And so, let’s schedule the appointment with the attorney. Let’s get this able account set up. Because that’s the challenging thing is like getting families who have a lot going on. Sometimes it’s chaotic every single day and you just kind of nudging them to accomplish their goals. It’s, you have a lot to carry.
David: The great thing about technology, you know, there’s obviously there’s challenges that come along with it. But you know, we can do so much more today than we could even 10, 15 years ago. You know, I work with clients across the country and I, you know, have clients that I’ve never met in person. Yeah. And that to me would have been unthinkable ten years ago.
But, you know, because of the technologies we have and because of the outreach we have through social media and people sharing their stories and things like that, we’ve been introduced to families all over. Who are, you know, who are in this situation and need some help.
Darryl: Yeah. Well, I really appreciate your heart for serving, and your intelligence, it’s like this perfect collision for you to take this next chapter and really serve this community. Well, really appreciate all that you do. And any final words? As I land this plane.
David: I would say, if anybody wants to have a conversation, the easiest way to get ahold of me is my email, which is just David@PAXFG.com. You could go to our website, PAXFinancialGroup.com. I’m even on Instagram now.
Darryl: Oh. Are you? You’re big time now, and you’re on LinkedIn, right?
David: I’m on LinkedIn. Instagram. Facebook. So, we’re out there. So, give us a call or shoot us an email.
Darryl: And last thing I forgot to mention or ask, what nonprofit boards are you serving on right now?
David: So right now, my wife and I are co-chairs of the Blood and Tissue Center Foundation. And that is, you know, that’s a big focus of our, you know, air quotes, right? Free time this year. But I personally serve on the board of the SA Hope center as well. And so, you know, being on two different boards would not be possible if I wasn’t sharing one with my wife, who is really the, I would say the main, you know, driver of that relationship.
Darryl: She’s pretty incredible.
David: Yeah. She’s awesome, so.
Darryl: Well, thank you, thank you, David. And thank you everybody for staying to the very end. I appreciate you tuning in. And be sure to share this with others specifically. Share it with others who you know, have a child who is disabled in some capacity so they can start thinking about not only their future, but their children’s future. And remember, you think different when you think long term. Have a great day.
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