Special Needs Planning: 6 Things You Should Know

We all know how important estate planning is – securing a legacy and smoothing out the transfer of wealth to family and others as much as possible.

But what if a family member has special needs? What if they can’t make many of these decisions on their own?

Estate planning is even more complex – and even more important – for families of individuals with special needs. Whether you’re a parent, grandparent, guardian, sibling or just a concerned friend of someone with special needs, there are a few fundamentals you should know.


1. Make sure you have the essential documents

When planning for the future it is essential that you have all your documents in order. As a general rule, you should keep your estate planning documents in a safe place, which is readily accessible in the event they are needed.

Documents for a loved one with special needs who is in your care should also be kept close at hand and easily accessible if needed when you are not available.

2. Set a goal for your planning

Planning must assure appropriate management of finances and personal decisions in the event of disability or death of both parents, with a goal towards avoiding future problems. Parents might also need to continue making decisions for a child with special needs during adulthood, provide for future residential needs, and find someone to care for the child when they are no longer able.

3. Find care services that develop independent living skills and an appropriate education

Unfortunately, there is no “training manual” on how to do things the right way. In fact, there probably is no one “right” way as the needs and concerns of each child with special needs are different.

Nevertheless, as part of this process, all parents likely need to find necessary care and services, foster the development of independent living skills and make sure their child receives an appropriate education.

4. Maximize financial resources for present and future expenses

A secure financial future to help allow for the highest possible quality of life for the child and other family members. Often, this involves securing eligibility for government-financed programs and supplementing those programs with private funds.

5. Obtain help from professionals

Although there are many support groups and community services available to assist parents who have children with special needs, at some point, it becomes necessary to obtain help from professionals.

In our experience, the best estate plans for families who have children with special needs arise from a team approach. In addition to the special needs planning attorney, it is critical that the family’s accountant, insurance and financial advisors be involved in the process. Of course, the family is an integral part of this process as well.

If appropriate, include the individual with special needs in these discussions to the extent possible. Because the needs and concerns of this kind of family are especially unique, an advisor who listens well before the planning process is crucial.

6. Secure eligibility for government-financed programs

When reviewing the child’s need for governmental benefits, take care to distinguish between those that are means-tested and those that are not based on the individual’s income or assets. Means-tested benefits are reduced or denied when income or assets are above certain limits. Although there are others, the two primary means-tested benefits that are important in most instances are Supplemental Security Income (SSI) and Medicaid. Both have strict asset and income requirements in order to qualify.

If eligible, Medicaid will cover long-term health care which can be extremely important for a child with disabilities. SSI is a Federal program that provides a monthly income supplement to meet basic needs such as food, clothing and shelter. The various programs have different rules regarding the treatment of unearned income and in-kind support from third parties. These differences often dictate the provisions that should be included in the client’s estate planning documents. The goal is to help assure that the child is not disqualified from these programs by assets placed in his/her name.

More than Just a Trust

Although some parents are aware of the array of legal issues they must confront, many arrive at the lawyer’s office concerned only about what will happen on their deaths and perhaps wondering about a “special needs” trust.

Although some parents are aware of the array of legal issues they must confront, many arrive at the lawyer’s office concerned only about what will happen on their deaths and perhaps wondering about a “special needs” trust.

Simply put: these are discretionary trusts drafted so that the income and assets are not counted as resources of the beneficiary with disabilities for purposes of establishing eligibility for means-tested government benefits. While special needs trusts are a critical component of an estate plan when planning for a family member with special needs, there is so much more that needs to be considered and discussed.

That’s why it’s so important to work with advisors who are not only knowledgeable in their substantive field but also who are aware of the many local and community resources available to family members with special needs.

This is not intended to provide specific legal, tax, or other professional advice. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.