Creating an Action Plan for the Future of Children with Special Needs

People living with disabilities are often capable of making their own decisions and are contributing members of the workforce, and society at large.

Unfortunately, some people with disabilities cannot live independently or make their own decisions. Parents of individuals falling into this category need to protect them when they reach the legal age of adulthood which is eighteen.

They also need to provide protection for the time when they can no longer care for their child’s needs. They must see to it that their child’s financial and custodial needs are always provided for.

Most Parents Aren’t Prepared

According to, MetLife Special Needs Planning recently conducted a survey, which reported some astounding statistics. According to the survey, sixty percent of parents who cared for a child with a disability did not expect that he or she would be able to live independently in the future.

Yet, these same parents have not written a will. Twenty-nine percent of those parents have not made any arrangements to ensure their child is cared for in the future when they are unable to do it. Eighty-eight percent of those parents have yet to set up a trust. Eighty-four percent of those parents did not write a letter of intent.

Seventy-two percent have not appointed a trustee to manage the finances of their son or daughter, and fifty-three percent have not appointed a guardian for their child. These are things parents of children with a disability must take the time to think about, and they must then take action.

No plan of action will be exactly the same because every situation is different; therefore, no child’s needs are exactly alike.

How to Get Prepared

First and foremost, parents must find an attorney who specializes in special needs trusts and who understands the ins, and outs of legally ensuring that a person with a disability or disabilities rights are protected, so that they can continue to be properly cared for based upon their individual and unique needs.

These lawyers often refer to themselves as Special Needs Planners. National Alliance on Mental Illness, (NAMI) can assist parents in finding a lawyer if needed. Parents need to sit down with their special needs planner to create a special needs trust that best fits the family’s situation.

Special Needs Trusts

Although, every trust is different because every person’s needs are different, all special needs trusts are designed to make sure persons with disabilities can have money to help support them.

The trust should allow them to remain qualified for certain government benefits such as Social Security income (SSI) which would be lost if additional income, such as inheritance money was not placed in a special needs trust.

The three most common kinds of special needs trusts in existence today are as follows:

  1. First-Party Special Needs Trust
  2. Pooled Trust
  3. Third-Party Trust

Normally, in order to collect SSI, a person can have no more than $2,000. A first-party trust can be set up by a parent, grandparent, or by a court. It makes it possible for a person with special needs to have assets above $2,000 because as long as those assets are in a First-Party Special Needs Trust they are not counted towards income.

In the event the person with special needs dies, the remaining money in that person’s trust goes to the government. Simply put, a Pooled Special Needs Trust can be set up by a non-profit organization to allow persons with special needs to pool their resources together with other people who also have special needs in order to invest their money.

Every person who benefits from this type of trust has his or her own account. In the event a person benefiting from this type of trust dies, the remaining money in that individual’s account goes to the government as reimbursement for care, however, some of it goes to the non-profit organization that set up the trust.

Finally, the Third-Party Special Needs Trust is in many cases the best one. This type of trust can hold within it any asset provided by the family or other person for the person with a disability’s use or care such as a house, or other property, and investments.

A person with this type of trust can also receive SSI and, in addition, the government is not reimbursed from a Third-Party Special Needs Trust. Leftover money from this kind of trust can go to other family members. It can also be donated to charity.

ABLE accounts are also an option and allow those with disabilities to save up to $100,000 without it impacting Social Security benefits. Check out our review of ABLEnow for more info.

Letter of Intent for Your Special Needs Child

In an article by Terri Mauro on entitled First Five Things to Do: Estate Planning, lawyer, Mary Browning, speaks about how imperative it is for parents to write a letter of intent for their child which outlines the specific and unique needs of the child/adult with special needs.

This letter must be given to the person’s caregiver after the parents are no longer able to care for their daughter or son. It is important to remember to remove a person with disabilities’ name from assets, and it is also a good idea to look into whole life insurance.

It is critical that once a special needs child reaches the age of eighteen parents have themselves appointed the legal guardians of their son or daughter if he or she cannot make financial, and/or medical decisions for themselves, and that parents assign that responsibility to someone well trusted and capable after they are unable to care for their child.

Preparing for the future of a child with a disability sooner rather than later can be unpleasant and at first inconvenient, but preparing for the future sooner rather than later provides peace of mind for parents and other family members.

Taking steps for a child/adult enables that child/adult to have some security that in the long run is better for the individual’s quality of life.

For more information on providing for the financial needs of children and adults with disabilities go to The National Special Needs Network or The Centers.

Contributor: Lauren Rosenberg is a freelance writer with 29 years of experience living with a disability; she was born in New York with Cerebral Palsy. She is an advocate who understands firsthand that there are problems in the disability community, and she wants to help solve them.

The biggest issue Lauren sees in the community is the way people with disabilities are treated and how they are seen in the general society.

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One Comment

  1. Avatar Paula @ says:

    Having both a will or trust, and a life insurance policy, is important for any parent — and especially important for the parent of a special needs child. Thank you for this detailed overview.

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