All parents worry about their children’s future, but when your child has an intellectual or developmental disability or a special healthcare need, those concerns often become more complex. You might find yourself asking:
What kind of life will my child want to lead, and where?
If my child is unable to work, how can I ensure that their expenses (like housing and food) are covered?
How can I save for my child’s future without jeopardizing their eligibility for government benefits?
Questions like these can easily keep you up at night. But financial experts agree that having a solid plan in place can help reduce that anxiety. Here are 10 steps to planning your child’s future. Some are simple, others more complex; some come at no cost, while others may involve legal fees. Starting now will help provide you with peace of mind as you look ahead.
- Establish a Special Needs Trust
A special needs trust is a crucial component of your child’s long-term care plan. It allows you to set aside money – whether from your savings, gifts from others, or insurance settlements – without affecting your child’s eligibility for essential federal benefits like Medicaid and Supplemental Security Income (SSI).
Even if you’re not able to contribute to the trust immediately, you can still establish one. By naming the trust as the beneficiary of your life insurance policy and estate, you ensure that those assets are directed there instead of directly to your child. Why is this important? Because if your child inherits assets over $2,000, they may lose eligibility for vital benefits like SSI.
Another option for securing your child’s financial future is an ABLE account. Created under the Achieving a Better Life Experience (ABLE) Act of 2014, this program allows you to open a tax-advantaged savings account specifically for individuals with disabilities, helping pay for qualified disability-related expenses without tax consequences. With an ABLE account, you can save up to $19,000 annually (in 2025), and the funds will grow tax-free.
- Draft a Will
A will outlines how your assets will be distributed after your death. By creating a will, you can ensure that your assets are directed to the special needs trust rather than directly to your child. Without a will, a probate court judge may assign your child as a beneficiary, potentially disqualifying them from receiving critical federal benefits like SSI (as mentioned earlier). A will is also where you can designate a guardian to care for your child.
When you have a child with disabilities, drafting a will is not something you should attempt on your own. It’s important to work with an experienced elder law, special needs planning, or estate planning attorney who is familiar with the specific laws in your state. After your will is prepared, ensure that your lawyer keeps one copy, and provide a copy to any executors or guardians named in the document. For assistance in locating an attorney, visit NAELA.org.
- Choose a Guardian
A guardian is someone who will step in to care for your child if you pass away before they reach adulthood. When selecting a guardian, think about the level of care and attention you currently provide. Who is capable of handling this responsibility? Who has formed a strong bond with your child? Consider who has the patience, empathy, and the personal qualities needed to manage the everyday demands of raising your child.
Once you’ve identified a potential guardian, it’s essential to discuss the responsibility with them, even though you hope it won’t be needed. Make sure they are willing to take on this role. Also, be sure to talk about how this commitment is likely to extend beyond your child’s 18th birthday.
- Appoint a Trustee
A trustee is responsible for managing/administering the special needs trust. This can be a family member, a close friend, an independent professional trustee, or even a bank or attorney. The trustee’s role is to ensure that the trust funds are used exclusively for your child’s benefit and only for the services you’ve designated or that are suitable for your child’s needs. They also oversee how the trust’s funds are invested. Importantly, the guardian who cares for your child cannot access or spend the trust funds without the trustee’s approval.
Regarding trustees and guardians: It’s common for these roles to be filled by different people, and many financial advisors suggest they should never be the same person. By separating these responsibilities, you establish a system of “checks and balances” to safeguard your child’s future needs.
- Grow Your Finances
Parents of children with disabilities quickly discover that necessary treatments or therapies are often not provided by the school system or covered by insurance. This is where personal savings become crucial. Begin setting aside whatever amount you can each month—no contribution is too small—to cover these additional expenses. Just be sure not to put this money in your child’s name.
Your savings can also help fund services like a special needs advocate. A special needs advocate is an expert in special education who can assist you with navigating the complex paperwork, programs, and laws that determine what services your child is eligible for. Start by contacting your state’s special education advocacy organization, such as your local Family Voices chapter. If additional help is needed, consider hiring a professional advocate. They can save you money in the long run by ensuring your child receives all the services they’re entitled to from the school district.
To find an advocate near you, ask for recommendations from other parents of children with special health care needs, or contact your local school district. You can also reach out to organizations dedicated to your child’s specific disability or to local colleges with disability programs.
- Draft a Letter of Intent
Planning for your child’s future is essential, but it’s equally important to ensure their everyday needs are taken care of if something were to happen to you. That’s where a Letter of Intent comes in. If your child has a specific daily routine, write it down in as much detail as possible. Include their daily, weekly, and monthly schedules, along with their likes, dislikes, and any community resources that may be helpful.
Be sure to include contact information for your child’s doctors, therapists, and other medical professionals, as well as a list of current medications, dosages, and schedules. If there are individuals you prefer not to have around your child or activities you want to avoid, make note of that too.
Remember to update this letter annually. Since it’s not a legal document, you can draft it yourself. Keep a copy with your will and ensure that your child’s appointed guardian has one as well.
- Prepare for Your Child’s Future Independence
Around the age of 14, start considering where your child will live as an adult. If you want them to qualify for a group home placement, you’ll need to register with your state’s developmental disabilities agency. Since the wait for group home placement can be as long as 10 years, it’s important to begin the process as early as possible.
In most states, individuals with disabilities lose eligibility for educational services through the public school system when they turn 21 or 22. After high school, your child may choose to attend college, vocational school, find a job, or engage in volunteer work. Many communities offer young-adult education programs that focus on life skills such as cooking, cleaning, job training, and financial literacy. To find out what programs are available in your area, reach out to your school guidance counselor or local Office of Vocational Rehabilitation.
- Seek Guardianship or Power of Attorney
Once children turn 18, they are considered legal adults and gain the right to make their own medical and financial decisions. If your child is unable to make these decisions independently, you may want to pursue legal guardianship. This allows you to continue providing supervision and making decisions on their behalf, just as you did when they were younger.
If your child can make some decisions but still requires guidance, consider establishing power of attorney for financial matters and a health care proxy for medical decisions.
It’s advisable to consult with an attorney to navigate this process, ensuring you have the necessary legal authority to manage your adult child’s healthcare and finances in case of an emergency. If your child is unable or unwilling to agree to your assumption of power of attorney, the court may need to make a determination on the matter.
- Inform & Educate Family Members
Grandparents, aunts, uncles, and other loved ones may want to contribute to your child’s expenses, but it’s important to explain why they should avoid putting anything in your child’s name. Have a family discussion to clarify why, for example, grandpa shouldn’t leave anything to your child in his will or name your child as a beneficiary on his life insurance policy. The same applies to gifts like savings bonds, stocks, or cash. Nothing should be in your child’s name!
If family members wish to leave something to your child, they can do so, but they should designate the special needs trust as the beneficiary to prevent your child from holding assets that could impact eligibility for benefits. Alternatively, they can contribute directly to your child’s ABLE account. For a list of ABLE programs by state, www.ablenrc.org/select-a-state-program/.
The attorneys at Shepherd Elder Law Group, licensed to practice in Kansas and Missouri, are here to help. If you are outside of these states, you can find help at NAELA.org.
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