4 Steps to Protecting a Child with Disabilities - Trust Point

4 Steps to Protecting a Child with Disabilities

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Raising a child is expensive and can cost over a quarter of a million dollars, excluding college. For a child with special needs, that cost can more than triple. If you’re the parent of a child with special needs, it’s vital to ensure your child will continue to be provided for after you’re gone. It can be difficult to contemplate, but with patience, love, and perseverance, and a long-term strategy, it can be attainable.1,2

Envisioning a Life After You

Just as every child with special needs is unique, so too are the challenges families face when preparing for the long term. Think about the potential needs of your child. Will they require daily custodial care? Ongoing medical treatments? Will your child live alone or in a group home? Can family members assume some of the care? Answers to these and other questions can help form the vision of what may need to be done to plan for your child’s care.

Preparing Your Estate

Without proper preparation, your child’s lifetime needs can quickly outstrip your funds. One resource is government benefits, such as Supplemental Security Income (SSI) and Medicaid, which your child may qualify for depending on their situation. Because such government programs have low-asset thresholds for qualification, you may want to consider whether to make property transfers to your child with special needs.

You should also make sure you have an up-to-date will that reflects your wishes. Consider creating a special needs trust (SNT), the assets of which can be structured to fund your child’s care without disqualifying them from government assistance. Very basically, an SNT allows you to leave assets to a loved one and preserve certain government benefits. Trust assets generally may be used to provide your disabled beneficiary with special or supplemental benefits, but not with certain other essentials, such as food, rent, medical care, or other basic benefits provided under a government program.

There are two types of SNTs – self-settled and third-party. A self-settled SNT is funded with the beneficiary’s own assets. A third-party SNT is funded with assets belonging to anyone other than the beneficiary and may be established by any third party (called the grantor).

Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.

There are many special advantages to using a special needs trust:

  • The trust can be customized to provide for the disabled beneficiary’s unique needs
  • Family conflict can be avoided
  • The disabled beneficiary’s eligibility for government benefits is preserved.
  • The need for a court-appointed guardian or conservator to oversee the beneficiary’s inheritance may be eliminated.
  • Any assets remaining in the trust following the disabled beneficiary’s death can be distributed to other beneficiaries specified in the trust agreement.

Involve the Family

All affected family members should be involved in the decision-making process. If at all possible, it’s best to have a unified front of surviving family members to care for your child after you’ve passed on.

Identify a Caregiver

In order for a caregiver to make financial and health care decisions after your child reaches adulthood, the caregiver must be appointed as a guardian. This can take time, so start setting this in motion as soon as you are able.

To do this, you can write a “Letter of Intent” to the caregiver and family to express your wishes along with information about your child’s care. This isn’t a legal document, but it may help communicate your desires. Store this letter in a safe place, alongside your will.

Outlining an approach for a child with special needs can be complicated, but you don’t have to do it alone. Working with loved ones and qualified professionals can help you navigate the various facets of this challenge. If we can help, please don’t hesitate to reach out.


1. Investopedia.com, December 14, 2023

2. AmericanAdvocacyGroup.com, 2024

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