Making Hard Financial Decisions When Teens Have a Mental Health Crisis

“Stick to your financial plan” are advisor words to live by. But when teens or young adults in crisis are unexpectedly diagnosed with late-onset serious mental illness (SMI), parents must make enormous financial planning changes to provide for their care.

“All of a sudden, they may be [facing] an outflow of tens or even hundreds of thousands of dollars each year they weren’t planning on,” Paul Peeler, financial advisor and partner with Integrated Financial Group, tells ThinkAdvisor in an interview. “You have to figure out a way to do it without bankrupting yourself.”

Peeler knows from personal experience about the effects of a sudden diagnosis of late-onset SMI because one of his own children has suffered from it since 2015.

Apart from the emotional shock, it “certainly changed my own financial plan,” he says in the interview.

Peeler specializes in helping caregivers of children with late-onset SMI, which is typically diagnosed as schizoaffective disorder, borderline personality disorder and bipolar disorder.

He works with caregivers to ensure that they’re adjusting their financial plan to “save appropriately” and make the right decisions for “how to spend their money for care,” he says.

In the U.S., “5% of the population deals with a serious mental illness,” according to Peeler.

But the “health care system for mental health isn’t a system at all. It’s a hodgepodge of dysfunctional programs,” he argues.

Peeler helps parents revise their retirement plans to conform to their new need and plan long term for their severely mentally ill child.

Based in Atlanta, Peeler, 56, is a 30-plus-year veteran of financial services, having worked earlier for Ameriprise, Charles Schwab and Harris Bank.

Mostly fee-based, he manages more than $50 million in client assets.

In the interview, he describes specific cases of children with late-onset SMI and related challenges.

He is founder of The Preparedness Project, a pro bono organization, which he explains in the interview. All fees are donated to the National Alliance on Mental Illness.

ThinkAdvisor recently held a phone interview with Peeler, who was speaking from Atlanta.

He says: When a child goes into crisis and is diagnosed with SMI, parent caretakers must make “a very quick pivot” in their financial plan to handle their now-higher expenses “without completely derailing [their] own personal finances.”

Here are excerpts from our interview:

THINKADVISOR: What’s the financial impact on caregiver parents of a child with late-onset serious mental illness (SMI), typically showing up in the late teens through the early 20s?

PAUL PEELER: When a child is born with autism or developmental disabilities, a parent has a lifetime to plan for their care.

With late-onset SMI, a crisis occurs out of the blue like a freight train and requires a very quick pivot in the middle of it.

What constitutes SMI?

Schizoaffective disorder, borderline personality disorder, bipolar disorder and major depressive episodes.

What sorts of crises might occur?

It can be that the person tries to harm themselves or someone else.

I had a client whose son was dealing with [severe mental health] issues, but when they let their guard down, all of a sudden they got a call from the Atlanta police that he was living in the woods.

They thought he was living in his apartment and going to his job every day.

What does a parent need to do when they get a shock like that?

You swing into action. You’re engaging care. You’re engaging medical professionals. You’ve got to engage law enforcement. You have to engage the legal community.

That’s what I mean when I say “crisis.”

Please explain the quick pivot required during a crisis that you mentioned a moment ago.

It takes a pivot to be able to absorb [the high additional expenses] without completely derailing the parents’ own personal finances.

Maybe they’re in the prime of their careers, and then all of a sudden, they may be [facing] an outflow of tens or even hundreds of thousands of dollars each year, with increasing maintenance costs of thousands a month that they were never planning on.

Their child may even have started to make their own way in the world, but now the parents need to make an enormous monthly outlay with, maybe, big medical costs that they were never planning on.

Do government programs help?

Many people who aren’t in this situation assume that the government provides a lot of benefits and Social Security for these [individuals and families]. But no. It falls on parents or other [caregivers, like a sibling].

It can be very shocking for a family when this happens. They were expecting to have a certain financial plan of saving and spending their money. But all of a sudden, there’s this crisis.

What do they need to do if they don’t have the kind of money that’s required? Cut back and shift priorities?

Yes. they have to make hard decisions. I recommend that people make them when they’re not in the middle of a crisis and write down the trade-offs they’re willing to make between their [needs and plans] and their child’s [or those of another family member with SMI] who’s in their care.

They need to make those hard choices when they’re not in the [upheaval] of a crisis, so they know how they’re going to handle such a situation [if and] when it comes up. It’s a tough deal.

What else does your role with these families involve?

I work with the caregiver to help them adjust their personal financial plan to make sure they’re saving appropriately and ensure that they’re making sound financial decisions on how to spend their money for care.

You have to figure out a way of doing that without bankrupting yourself.

What’s The Preparedness Project?

A pro bono organization that I run for families in crisis who may not have the resources to engage the help they need.

We do basic financial analysis for them and prepare four or five action items they can move forward with, on their own or with an intermediary.