Planning for a Lifetime of Care
If you have a child, grandchild, or other loved one with special needs, you know the planning never stops. You think about who will care for them when you’re gone, how they’ll be provided for financially, and how to ensure they continue receiving the services and support they need.
Special needs planning addresses these concerns through legal strategies that allow you to provide for your loved one without jeopardizing the government benefits they may depend on for healthcare, housing, and daily support. At Legacy Estate & Elder Law, we help Louisiana families create comprehensive plans that protect their loved ones both now and in the future.
Why Special Needs Planning Matters
Many government benefit programs for people with disabilities—including Supplemental Security Income (SSI) and Medicaid—have strict income and asset limits. If a person with disabilities receives an inheritance, gift, or settlement directly, they can lose these vital benefits.
A well-meaning grandparent who leaves $50,000 directly to a grandchild with disabilities may actually harm that grandchild by disqualifying them from Medicaid, which may be paying for essential medical care, therapy, or residential services. Once benefits are lost, they can be difficult to restore.
Special needs planning allows families to provide financial support while preserving benefit eligibility. With proper planning, you can ensure your loved one has resources for the “extras” that government benefits don’t cover—without sacrificing the foundation of support they need.
Special Needs Trusts
A special needs trust (also called a supplemental needs trust) holds assets for the benefit of a person with disabilities without counting toward their resource limits for government benefits. The trust can pay for things that enhance quality of life: vacations, electronics, entertainment, education, specialized therapy, and more.
Third-Party Special Needs Trusts
A third-party special needs trust is funded with assets that never belonged to the beneficiary—typically gifts or inheritances from parents, grandparents, or others. These trusts offer significant advantages: no payback requirement to Medicaid at the beneficiary’s death, and any remaining funds can pass to family members you designate.
Third-party trusts can be created during your lifetime or through your will. Creating them during your lifetime allows you to fund them gradually and lets family members contribute directly.
First-Party Special Needs Trusts
A first-party special needs trust is funded with the beneficiary’s own assets—perhaps from a personal injury settlement, inheritance received directly, or work income. These trusts must include a “payback provision” requiring that remaining funds reimburse Medicaid for benefits provided during the beneficiary’s lifetime.
While first-party trusts have less favorable terms than third-party trusts, they can still preserve benefit eligibility and provide significant quality-of-life benefits during the beneficiary’s lifetime.
Louisiana ABLE Accounts
ABLE (Achieving a Better Life Experience) accounts are tax-advantaged savings accounts for individuals with disabilities. Louisiana residents can open ABLE accounts that allow the beneficiary to save up to $100,000 without affecting SSI eligibility (though amounts over $100,000 will suspend—not terminate—SSI benefits).
To qualify for an ABLE account, the disability must have begun before age 26. Funds can be used for qualified disability expenses including education, housing, transportation, employment support, assistive technology, and more.
ABLE accounts offer several advantages over special needs trusts for smaller amounts: lower setup and administrative costs, the ability for the beneficiary to control the account themselves (if able), and tax-free growth of funds. However, ABLE accounts have annual contribution limits and may have payback requirements similar to first-party trusts.
Continuing Tutorship in Louisiana
In Louisiana, when a child turns 18, parents automatically lose the legal authority to make decisions for them—even if that child has significant disabilities. Louisiana provides a mechanism called “continuing tutorship” (in other states, this might be called guardianship of an adult child) that allows parents to continue making decisions for their disabled adult child.
Continuing tutorship must be established before the child turns 18 or within a limited window afterward. This is one of the most time-sensitive areas of special needs planning, and families often don’t learn about it until it’s too late.
The continuing tutorship process requires medical documentation of the child’s disability and a court proceeding. Once established, parents can continue to make medical decisions, manage finances, and handle other matters for their adult child.
Letter of Intent
While not a legal document, a letter of intent is one of the most important things you can create for your special needs loved one. This detailed letter tells future caregivers everything they need to know about your loved one: their daily routines, likes and dislikes, medical history, behavioral triggers, communication methods, and your hopes for their future.
A letter of intent ensures that the people who care for your loved one after you’re gone understand them as a person—not just as a set of medical diagnoses or care requirements.
Coordinating Special Needs Planning with Estate Planning
Special needs planning doesn’t exist in isolation. It must be coordinated with your overall estate plan to ensure that your special needs loved one is protected while also providing for your other family members.
Important considerations include ensuring your will doesn’t accidentally leave assets directly to your disabled beneficiary, treating siblings fairly (which doesn’t always mean equally), planning for your own potential incapacity, and addressing what happens if your disabled beneficiary predeceases you.
Contact Louisiana Special Needs Planning Attorneys Today
Planning for a loved one with special needs is complex, but you don’t have to navigate it alone. Legacy Estate & Elder Law helps families create comprehensive plans that provide for their loved ones while preserving essential benefits.
Contact us today to schedule a consultation at our Baton Rouge, New Orleans, or Lake Charles office.