Parents and guardians that have children with special needs must plan with care so that income and assets can be used in the best interest of their child. With careful legal and financial planning, parents can make sure that their children have a good quality of life as time goes on. Proper planning will allow your child to have the services he needs, such as Social Security (SSI) and Medicaid, without being penalized for having assets from sources such as a gift from family or income from a lawsuit. We hope this page will help you start to build familiarity with all that goes into planning for your child’s long-term future.

Estate planning looks different for each family. Getting started can be the hardest part. We suggest that you start by talking to a professional financial planner and/or a lawyer who has experience working with parents of children with special needs. An expert will know the challenges, rules, and details of Medicare, SSI, guardianship, and other issues of concern for you and your family. An expert will be able to give you advice about trusts and accounts you can set up for your child.

Finding answers to hard questions about finances can ease worries about your child’s future. The steps below can help you get started:

Talk to a financial planner and/or a lawyer

• Many law firms and life insurance companies have special needs consultants.
• Make sure to find one who is skilled in special needs trusts and planning.

Write a letter of intent

• Some parents have found it helpful to write a draft letter of intent, or simply jot down their concerns before meeting with a planner or lawyer to write the letter of intent.

Establish guardianship (and successors) if needed

• A Guardianship and Alternatives is a legal relationship in which a person is designated by law to make choices for another person.
• The guardian is appointed by a judge to act in support of someone who cannot manage his or her own affairs.
• Guardianships are often thought of as something for children, as they cannot make legal decisions for themselves, but guardianships also can be used to protect adults with disabilities.
• If you are planning to care for your child after they turn age 18, you will need to set up guardianship.
• Talk with a special needs consultant about guardianship choices.

Consider your child's financial needs

• You can project your child’s financial needs by using a Special Needs Calculator for Estate Planning before meeting a planner or attorney.

One way of providing for your child with special needs is through a Special Needs Trust (SNT). Also called a “supplemental care trust,” an SNT is a legal way to make sure that the assets you leave to your child are available when he or she needs them. An SNT gives your child use of funds, while the assets are handled responsibly. This section explains SNTs: their benefits, proper uses, and how you can fund an SNT for your child. It also goes over revocable trusts, which can be set up along with your child’s SNT.

What are the benefits of a Special Needs Trust?

What are acceptable uses for SNT funds?

How can I fund an SNT for my child?

Who will serve as trustee for your child?

A revocable trust is an added fund you can set up along with your child’s SNT. You can set up this trust while you’re living, but you are allowed to make changes to it as you see fit. A revocable trust is of great value if you set it up with your will. Your assets can be funneled into the trust automatically upon your death, without the costly and time-consuming process of a will. Another advantage of this is that other family members, like grandparents, can also use the trust to gift money to your child.

Another good option for saving money and not losing benefits is an ABLE account, which is only the cost of securing a bank account. ABLE accounts come from the ABLE Act, which amends Section 529 of the Internal Revenue Service Code of 1986 to create tax-free savings accounts for people with disabilities. By making tax-free savings accounts available to cover qualified disability-related expenses (including education, housing and transportation), this law aims to ease financial strains faced by people with disabilities. Additionally, the funds added to these accounts will not negatively impact the person’s eligibility for public benefits, such as Medicaid. The funds in these accounts don’t replace benefits provided through private insurances, the Medicaid program, the Supplemental Security Income program, the beneficiary’s employment and other sources. Instead, the funds supplement these benefits. For more information on ABLE Accounts and how to set one up, go to: ABLE National Resource Center.