What To Know About Estate Planning For A Child With Disabilities

We know that parents want their estates to be utilized to better and improve the life of their child who may have special needs while also ensuring that the child maintains their enrollment in necessary public benefits programs.

These wishes can be ensured with a special needs trust that is prepared properly.

What You Shouldn’t Do

The following is not what we at Sivia Law recommend as an option for parents when creating an estate plan for their special needs child who currently receives needs-based public benefits:

• Leave your special needs child an inheritance. This will cause a negative effect on the child’s eligibility for public benefits in the future. At minimum the child's benefits can be decreased, worst case the child can become ineligible for public benefits. These can include Medicaid, Supplemental Security Income (SSI) benefits, vocational rehabilitation, assisted housing, group housing, job coaching, supported employment, transportation assistance, and attendant personal care aids. Medicaid is the most beneficial as it provides the child the access to essential healthcare and other public assistance programs.

• Take away inheritance from your child. This choice is the easiest, however it is not fulfilling the key purpose of bettering your special needs child's life. 



• Give your other children that have no special needs the estate. This can result in having many risks arise, such as mismanagement of funds, bankruptcy, divorces, and more. 

What You Should Do 

Create a Special Needs Trust and leave their inheritance there. This is most preferred by parents because it makes sure that there is a beneficial outcome for their special needs child.

When you have drafted a proper and administered Special Needs Trust, your child will remain eligible for public assistance programs in the future that they may have not qualified for previously, specifically the means tested programs that request that the children meet very demanding financial eligibility criteria.

Since the assets that are kept in the trust are not available to the child, a special needs trust is what works best in the long run. These trusts must be very strict with the ability of the trustee to distribute money to the child. At no point can the child force or pressure the trust to make any of the money in the trust available to them.

When the parents are creating the trust, they choose who the trustee will be for their special needs child upon their death. Since in most cases the child cannot manage their own finances, this ensures that there is proper handling of the trust and finances once the parent passes away.

Create A Special Needs Trust At Death or While Living

There is the option to create a Special Needs Trust once you pass away by including a trust that is in a Last Will and Testament. This is known as a testamentary trust. Another option for parents is to create the Special  Needs Trust while still alive. As you can guess, this is called a living trust.

The benefits of going with the living trust is as follows:

• A co-trustee having the opportunity to administer the trust and get hands-on experience.

• Probate is avoided.

• Other family members, normally grandparents, can give contributions to the trust once created.

Is It Irrevocable Or Revocable?

When deciding whether to make the Special Needs Trust irrevocable or revocable, taxes start being considered.

Normally a family will choose to have a revocable trust when:

• There is not a concern by the family with the income taxes. 

• There is a goal to maintain all control over the trust.

However having an irrevocable trust is necessary if the family is concerned with things like:

• More than a million dollars is getting deposited into the account from things such as gift or federal estate taxes.



• There are considerations for income taxes.

Choosing A Trustee

The person who is responsible for administering the Special Needs Trust is the Trustee. When choosing the Trustee there can be pressure and stress associated with the process to ensure the long-term success of the Special Needs Trust. In most instances, it may be best to choose a non-family member over a family member to be your Special Needs Trustee.

Some options may include:

• A financial institution or Trust company

• A sibling or parent

• Your attorney

• A family member acting with a trust company as a co-Trustee



• A non-profit organization with experience with special needs

Interested in Working With Us?

If you need any help regarding your estate or other legal matters please reach out to us directly here and schedule a call with one of our paralegals on our scheduling page here.