Planning for Special Needs Children

Special Needs KidsIt’s no surprise that having a special needs child is both challenging and rewarding.  Not only are there school and medical issues to consider, there are also the financial needs of your child.  Planning for your child’s financial well-being should be an important part of your estate plan especially since improved healthcare has allowed children with conditions such as cerebral palsy and Down’s Syndrome, to live longer.

What do you need to do to provide for your special needs child?  These things can help during the special needs child planning process.

A Will

The most basic and best thing you can do have a Will.  Most people, whether or not they have special needs children, don’t have a will.  Without a will, the state decides how assets and property will be distributed. Also, depending upon which state the loved one resides in, a spouse may not automatically inherit assets and property. Let’s not forget about children, in particular special needs children.  While a will is important, with special needs children, you shouldn’t stop there.

A Special Needs Trust

Next you should establish a Special Needs Trust that will help pay for expenses not covered by Medicaid and Supplemental Security Income (SSI). Trusts can be used for incidental expenses of daily life, such as paying for a cellphone, a vacation or services that Medicaid doesn’t cover.  For example, 10 hours of therapeutic services a week are needed for your child, but Medicaid only pays for 5; the trust can pay for the remaining services.  When you set up a trust, make sure that assets meant for the child will be left to the trust. Many special needs children won’t be educated past high school and won’t be able to work. Giving assets directly to the child will disqualify him or her from receiving Medicaid and Supplemental Security Income (SSI).

A Transition Plan

Once a Special Needs Trust is set up, you need to let extended family (grandparents, aunts, uncles) know about its existence so that they if they choose to make a monetary gift to the child or include the child in their own estate plan, the trust is to receive the funds, not the child directly. It is also important to spell out your child’s likes and dislikes in a letter of intent. While this isn’t a formal legal document, it is helpful to have a list of your child’s favorite foods, sports teams, film genre and other items. This helps both future caregivers and your child since the document will make note of all the little things that help maintain his/her quality of life.

One of the best things you can do for your child is to prepare for the future. Planning for a special needs child does not need to be an onerous process. With advance thought, preparation, and the assistance of an Elder Law Attorney, the necessary documents can be created and filed away in a safe place, giving you peace of mind knowing that your child will be well cared for.  Whatever he or she needs when you are gone, it will be taken care of because you planned ahead.


Morgan Stanley – Financial Planning for Families with Special Needs Children

Friendship Circle – 7 Financial Planning Mistakes Special Needs Families Should Avoid

Bankrate – Financial Plans for Special-Needs Children

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