Long-Term Financial Planning for a Child With Special Needs

By Annie Stuart

At a glance

  • Financial planning for a child with special needs requires unique approaches.

  • You may want to consider setting up a special needs trust to help protect your child’s access to government benefits.

  • Certain lawyers have expertise in special needs estate planning.

Some kids with profound learning disabilities may need financial support for life. But how can you plan far into the future when there are so many pressures to deal with right now?

One thing is certain: Whatever planning you do now is sure to make a difference. Here are some ways to help ensure a more secure future for your child.

Special Needs: Letter of Intent

You’re doing everything in your power to help your child become independent one day. Despite your best efforts, you have concerns about whether or not your child will be able to financially support himself. It’s hard to avoid the question: “What will happen after my death?”

You can take some steps now to prepare for that day. Many parents put together a Letter of Intent. This document helps spell out your wishes for your child. Although it’s not legally binding, it may be incredibly helpful for friends, family and any future caregivers.

A Letter of Intent often includes details such as these:

  • Hopes and dreams for your child’s future
  • Preferred living arrangements
  • Your child’s medical history
  • The personal care needs of your child
  • Recreation, social and community interests

Share this document with family members and friends you trust. Regularly review and update it as needed.

Special Needs Estate Planning

You may think the best way to provide extra financial support to your child in adulthood is to start an account in his name. But that may not be the case. Assets greater than $2,000 in the name of your child, regardless of his age, may make him ineligible for government programs such as Medicaid and/or Supplemental Security Income.

A special needs trust can pay for a number of things that government programs don’t cover.

One step you can take is to hire an attorney to set up a special needs trust for your child. A trust can pay for a number of things that government programs don’t cover. This might include education, entertainment, vacations and computer equipment. If done correctly, a trust can help meet your child’s needs without keeping him from getting government benefits.

You can set up a special needs trust while you are alive (a living trust). Or you can set one up as a part of your Last Will and Testament (a testamentary trust). Of course, you’ll want to find an attorney with plenty of experience with these trusts.

Here are some questions to ask when looking for an attorney:

  • How many special needs trusts have you written?
  • Are you familiar with recent changes in disabilities laws and regulations?
  • Are you knowledgeable about current government benefits programs?

Special Needs: Guardianship or Conservatorship

It may end up being necessary for you to keep control over financial and health care decisions for your child even after he becomes a legal adult at 18. If you think that might be the case, you must apply for guardianship or conservatorship. In some states, this can take up to a year to process.

It’s hard not to worry about how your child will manage if you’re not around to help support him. Long-term financial planning can help relieve some of that stress and let you focus on meeting his needs now.

Key takeaways

  • A letter of intent can guide any future caregivers about your child’s special needs.

  • You may prevent your child from getting valuable government benefits if you put assets in his name.

  • You must apply for guardianship or conservatorship to keep legal control over your adult child’s financial and health care decisions.

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    About the author

    About the author

    Reviewed by

    Reviewed by

    Tara Anne Pleat, JD is a lawyer specializing in special needs estate planning and trust and estate administration.