If you’re a parent of a child with special needs, the future can feel uncertain—especially when you think about what would happen if you were no longer around to care for them. Many parents are surprised to learn just how much they need to do to protect their child’s well-being—not just financially, but emotionally and physically as well.
Estate planning is always important, but for families with a child who has a physical, mental, or developmental disability, the stakes are even higher. Without the proper legal and financial structures in place, your child could be left without adequate care—or worse, lose access to essential government benefits.
In this guide, we’ll walk you through the two critical components of estate planning for a child with special needs: naming legal guardians and setting up a special needs trust.
Naming Guardians
One of the most important decisions you’ll ever make is choosing who will care for your child if you no longer can. For a child with special needs, the decision to name a guardian is even more complex, especially if your child will never be able to live independently.
Short- and Long-Term Guardianship
You should legally name both short-term and long-term guardians to ensure your child is never placed into the hands of strangers or the state system in an emergency. A short-term guardian can step in immediately if something unexpected happens to you, while a long-term guardian provides care over your child’s lifetime.
Instructions & Incentives for Quality of Life
We often help families create detailed guidance for guardians—down to the little things that bring your child joy. For example, if you take your child to the movies or dinner every week, you can include written instructions (and even compensation) to ensure those cherished routines continue.
This level of planning not only protects your child’s well-being but gives you peace of mind knowing they’ll continue to receive the kind of love and attention you provide.
Why You Shouldn’t Leave Money Directly to Your Child
Many well-intentioned parents assume they should leave an inheritance to their child in their will. Unfortunately, doing so could jeopardize your child’s access to vital government programs such as Medicaid or Supplemental Security Income (SSI), which have strict income and asset limits. Instead, you should use a special needs trust to hold and manage assets on their behalf.
Using a Special Needs Trust to Protect Benefits and Provide Support
A Special Needs Trust (SNT) allows you to set aside money and other assets for your child’s benefit without affecting their eligibility for government programs. Funds in the trust can be used for supplemental needs—such as personal care aides, therapies, recreation, education, and other life-enhancing expenses.
Types of Special Needs Trusts
There are two main ways to set up an SNT:
Stand-Alone Special Needs Trust:
Created during your lifetime and can be funded immediately. Ideal if grandparents or relatives want to contribute gifts or inheritances now.
SNT Within a Revocable Living Trust:
This trust is created as part of your estate plan and “springs into action” upon your death. Your assets pass into the SNT at that time.
We’ll help you choose the right structure based on your family’s needs and goals.
Setting Up and Managing the Trust
When you set up a special needs trust, you’ll typically serve as both the creator (grantor) and the initial trustee, managing the trust while you’re alive. Your child is the beneficiary, and you’ll need to name a successor trustee to take over when you’re no longer able. This person is legally responsible for using the trust funds according to your instructions and for your child’s benefit.
To avoid conflicts, it’s often best to name someone other than your child’s guardian as trustee—or to consider a professional trustee or co-trustee arrangement. The key is choosing someone capable and trustworthy to manage the trust with your child’s long-term care in mind.
Choose Trustees Carefully
To prevent overburdening any one person, we often recommend naming someone other than the legal guardian as trustee. You can also appoint a professional trustee (such as a bank, trust company, or attorney) or have a co-trustee structure for checks and balances.
Trustee Duties and Responsibilities
A trustee has a serious legal obligation to:
- Use the trust’s funds in your child’s best interest
- Avoid disbursing funds in ways that would affect benefits eligibility
- Pay any applicable taxes
- Maintain records and comply with laws
- Stay current with the child’s evolving needs
Because the laws surrounding government benefits are complex and ever-changing, it’s often best to name someone with legal or financial expertise—or work with a law firm like ours that can advise and support the trustee.
Funding the Trust
A special needs trust must be properly funded to support your child over their lifetime. One of the most common methods is naming the trust as the beneficiary of a life insurance policy, which can provide a reliable source of future funds. You can also transfer assets into the trust during your lifetime, and encourage other family members—such as grandparents—to make gifts or include the trust in their own estate plans.
We can help you explore these strategies and develop a sustainable funding plan tailored to your situation.
We’re Here to Help You Plan With Confidence
At Legacy Counsel PLC, we understand the deep love and commitment you have for your child—and how overwhelming this kind of planning can feel. You don’t have to figure it all out on your own.
We’ll guide you through the process of creating a comprehensive special needs estate plan that ensures:
- Your child is cared for by people you trust
- Their financial needs are met for life
- Their access to critical benefits is preserved
Let us help you gain the peace of mind that comes from knowing your child’s future is secure.
Contact us today to schedule your consultation and begin building a thoughtful, legally sound plan for your child’s lifelong care and happiness.
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