If you have a child with special needs, standard estate planning advice doesn’t apply to your family. In fact, following it could seriously backfire.

Here’s why.

The benefits problem Programs like SSI and Medicaid are means-tested — your child has to have limited assets and income to qualify. If you leave money directly to your child, or name them as a beneficiary on a life insurance policy or retirement account, those funds could disqualify them from the very benefits that pay for their medical care, housing, and therapies. The same goes for well-meaning grandparents who leave money directly to your child in their will. A gift made with love can result in months or years of lost benefits.

This is why your family needs a different kind of plan. A Special Needs Trust (SNT) is the foundation of planning for families like yours. Money held in the trust belongs to the trust — not to your child — so it doesn’t count against their eligibility for government benefits. The trustee can use those funds to cover things benefits don’t, like therapies, travel, technology, education, and anything else that improves your child’s quality of life.

There are two types. A third-party SNT is funded by parents or family members and is the most common setup. A first-party SNT is used when your child receives their own assets — through an inheritance or lawsuit settlement — and comes with a Medicaid payback requirement at death. Most families are setting up a third-party trust.

Choosing the right trustee matters enormously. This person needs to understand both the financial rules and your child’s life. Many families use a combination of a trusted family member and a professional co-trustee.

Money is only part of this. A complete plan also addresses who makes decisions for your child when you can’t. When your child turns 18, your legal authority ends automatically. You’ll need to put guardianship or another decision-making arrangement in place before that happens.

A Letter of Intent is equally important — not a legal document, but a detailed guide for future caregivers. Their routines, preferences, fears, favorite foods, medical providers, communication style. Everything someone would need to actually know your child. It’s one of the most important things you can create.

You’ll also want to review every beneficiary designation you have — life insurance, retirement accounts, any account with a named beneficiary — and make sure funds are directed to the trust, not to your child directly.

Keeping it current A plan that isn’t maintained will fail. Laws change, benefit programs shift, your child’s needs evolve. This is not a one-time task. When we work together, we build a plan that gets reviewed and updated over time — because that’s the only kind that actually works.

Next Steps

We can help! If you’re ready to get started on your planning, begin by booking a Legacy Planning Session. We’ll answer your questions, go over your options, and talk about our flat fees. Mention this blog and we’ll waive the $550 session fee. [Book here.]