Special Needs Planning
To schedule an appointment, contact:
Laura Akins Smith
Elizabeth O. Lawrence
Special Needs Planning
Families who have a loved one with a disability often carry two sets of concerns at the same time: caring for their loved one today and making sure their loved one is protected in the future. “Special needs planning” is the legal framework that ties those concerns together. It ensures that your loved one can obtain (or keep) eligibility for vital public benefits, such as Medicaid and SSI/SSDI, while still having access to resources that improve their quality of life.
At K&L, we work with families every day on these issues, and we see how empowering it is when parents and caregivers understand their options. Here’s what you need to know:
What Is Special Needs Planning?
Special needs planning is a tailored approach to estate planning for the financial and legal well being of a person with a disability and for their family. It’s not just wills and trusts; it’s a coordinated strategy that considers:
- Long-term financial support
- Protection of eligibility for needs-based benefits (Medicaid, SSI, waiver programs)
- Housing and support services
- Care management and decision-making
- Guardianship or supported decision-making, when necessary
- Succession planning for caregivers
This type of planning fills in the gaps that traditional estate planning misses. Without it, even a well-intended gift or inheritance can unintentionally disqualify someone from critical benefits.
What Is a Special Needs Trust?
A Special Needs Trust (SNT) (also known as a “supplemental needs trust”) is the cornerstone of most special needs estate planning. It allows money to be set aside for a person with a disability without counting as their personal asset for purposes of Medicaid or SSI eligibility.
Two main categories exist:
- First-Party (Self-Settled) SNT: Funded with the beneficiary’s own assets (e.g., a personal injury settlement, retroactive disability benefits, or an inheritance that arrived without planning).
- Third-Party SNT: Funded by someone else—typically parents, grandparents, or other relatives.
What can a SNT pay for?
A SNT can certainly pay for essentials, but it can also pay for supplemental or quality-of-life expenses, including:
- Therapies and medical care not covered by insurance
- Transportation
- Education and vocational training
- Personal care aides
- Technology
- Recreation, travel, and social activities
- Home modifications or equipment
The trust is managed by a trustee, who is responsible for spending trust funds in a way that provides specific support for the beneficiary and doesn’t jeopardize their public benefits.
During your consultation, we’ll discuss all these things, including what type of trust you need, the best choice for a trustee, and how a SNT will work when primary care providers are unable to provide the same level of care.
Why Is Special Needs Estate Planning So Important?
- Protects Eligibility for Benefits
Medicaid and SSI have strict income and asset limits. A gift, an insurance payout, or an unplanned inheritance can cause a loss of benefits—sometimes for months or longer—unless protected by a proper trust.
- Ensures Your Loved One Has Lifelong Support
Parents’ number one worry is: “Who will care for my child when I’m no longer here?”
Special needs planning provides a roadmap so that caregivers, trustees, and family members know exactly what you want and how to follow through with those wishes.
- Prevents Court Involvement
Without planning, families may be forced into:
- Lengthy conservatorships
- Court-created trusts
- Expensive and time-consuming oversight
A well-drafted SNT avoids these complications.
- Coordinates Family Assets Wisely
Planning allows:
- Assets to flow directly to the trust
- Grandparents and relatives to gift without concern for interruption in benefit eligibility • Retirement plans and beneficiary designations to be structured correctly
This coordination prevents accidental disqualification from benefits.
The Bottom Line
Special needs estate planning is about more than documents. It’s about understanding available benefits and services, safeguarding opportunities, preserving resources, and ensuring that your loved one can live a full, secure, and dignified life.
If you care for someone with a disability, it’s never too early to start planning. A well-crafted Special Needs Trust can serve as the foundation of a plan that continues to protect your family long after you’re gone.