Planning for a Child with Special Needs

Ensuring that special-needs children have support and resources when parents are no longer around to care for them takes planning and being aware of the available options.

Special-Needs Trust

Setting up a special-needs trust can help preserve government benefits, such as Supplemental Security Income (SSI), guaranteeing the recipient a minimum income, and Medicaid. Because funds in the trust don't count when determining benefit eligibility, they can be used to supplement an employed child's income, pay for therapies not covered by Medicaid, or purchase extras your child wants.

A special-needs trust doesn't have to be funded immediately. Making the trust, rather than your child, the beneficiary of your estate ensures that your child won't loose government benefits. Choose someone as trustee who is close to your child, such as a sibling or other relative, to manage the trust on your child's behalf.

ABLE Accounts

ABLE (Achieving a Better Life Experience) accounts are tax-advantaged savings accounts. Money in the account can be used for any qualified disability expense. Accounts can be set up at any time in a disabled person's life if the disability occurred before age 26.

Money from a special-needs trust can be transferred into an ABLE account. Your child can manage the account, using a debit card to make purchases. If desired, you or the trustee of the special-needs trust can set spending limits.

Planning for a child with disabilities can be complex. Consult an estate-planning attorney who specializes in disability planning to ensure compliance with government regulations and safeguard your child's benefits.