Four Ways to Plan for Your Special Needs Child

mother with special needs daughter

Part of caring for a child with special needs is creating a plan for when you’re no longer living. There are a few different planning options that you’ve probably already heard of from other special needs parents or professionals. As special needs planning attorneys, we’ve seen parents utilize all of these different options. We’ve found over the years that a special needs trust is the most helpful, and leaves your child with the most options to enjoy life.

1. Disinherit Your Child

Disinheriting your child is often viewed as a good option. No inheritance means the child’s assets will remain below the levels required for Medicaid or SSI benefit eligibility. Unfortunately, this may make your child feel they are not as important as other family members. It also leaves them relying on the bare minimum provided by government benefits. Typically these benefits only cover food, clothing, shelter and medical care.

2. Leave Assets to Siblings

Another option is to leave your assets to siblings of your child with special needs. The intent is that the sibling left in charge will look after their brother or sister and provide for them with these assets. This option assumes that the siblings won’t lose the money or use it for themselves. Even siblings with the best intentions can easily lose money in a divorce or to creditors. Leaving assets to siblings also assumes that they have the desire and energy to take care of their special needs sibling for the rest of their life.

3. Leave Assets to a Pooled Special Needs Trust

In a pooled special needs trust, the assets of a group of beneficiaries are pooled together and managed by a non-profit organization. The non-profit organization will then use these funds for the benefit of the beneficiaries. This type of setup can work well where there are no family members available to act as a trustee or the level of asssets is not large enough to justify the complexity of establishing a stand-alone trust.

4. Create a Stand Alone Special Needs Trust.

Creating a stand alone special needs trust is typically the best option. By creating a stand-alone special needs trust, you can leave assets to your child that are not countable assets for Medicaid or SSI purposes. The assets give your child a financial safety net, and can fill gaps left by government benefits programs. Even when government benefits are not an issue, a properly drafted trust with care manager provisions and a professional trustee can make sure that your special needs child is not taken advantage of or abused.

Special Needs Trusts

A special needs trust a great way to leave assets for yout child without jeopardizing their government benefit eligibility. For a special needs individual, government benefits are often vital. Medicaid is typically the only type of health insurance available to a special needs child. If your child is already using governement benefits, leaving them assets directly may disqualify them. They will be faced with spending down those assets before they can requalify for Medicaid and often the assets run out months or years before they can requalify for Medicaid.

Planning for Peace of Mind

Planning for the future is equally as important as taking care of your child’s current needs. If you have a child with special needs, it’s best to take action and create your plan with a special needs attorney.  Review your current plans and discuss what else your family might need. One day, you’ll be gone, but you can put the right plan in place to make sure your special needs child receives the proper care for their entire life.


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