The moment a parent first imagines their child’s future, they picture possibility: school, work, independence, happiness. But for families of children with developmental disabilities, those dreams often come with an undercurrent of worry that echoes, “Who will care for my child when I no longer can?”
October is National Special Needs Law Month, designated by the National Academy of Elder Law Attorneys (NAELA), with a goal to raise awareness about the legal needs of people with disabilities and their families. Despite a recent increase in the number of resources available to families, many continue to face the heavy reality of providing lifelong care and the challenge of funding that care without jeopardizing vital government benefits like Supplemental Security Income (SSI) and Medicaid.
That’s exactly where special needs planning comes in.
One of the most effective planning tools available is the Special Needs Trust (SNT). An SNT allows families to set aside funds for a loved one’s future care without disqualifying them from SSI or Medicaid. While the rules for how and when trust funds can be used vary by state, the goal is always the same: protecting access to benefits while ensuring long-term security and quality of life.
Consider Laura, a single mom raising her teenage son, Ethan, who has autism. Laura had worked hard to save what she could, but every time she looked at her bank statements, she felt the same knot of anxiety: She knew if she left her money to Ethan directly, he could lose his benefits, but
wanted to make sure he got what he needed if anything should happen to her.
Creating a Special Needs Trust brought her the clarity she was searching for. “For the first time,” she told me, “I could plan for Ethan’s future without feeling like I was putting his support at risk.”
Still, as her attorney, I reminded her, establishing the trust was only the first step. The next, and often most overlooked, part of the process is understanding how much care will actually cost over a lifetime.
It’s easy to underestimate the true costs of long-term care. What seems like a sufficient amount in the trust today can dwindle quickly once you factor in decades of living expenses and support.
Families should start by listing every anticipated need, including:
- Housing and home modifications
- Ongoing medical care and therapy
- Care assistance and personal support staff
- Transportation and specialized equipment
- Educational or vocational programs
- Replacements and upkeep (from mattresses to vehicles)
- Personal needs such as hobbies, outings, and entertainment
Once you’ve listed these needs, assign estimated costs to each to identify your long-term funding goal. Working with a local expert ensures that your plan reflects the real costs and available resources in your area.
Funding a Special Needs Trust can be done in several ways. Some families have enough assets to fund the trust immediately. Others may use a combination of retirement accounts (like IRAs, 401(k)s, or 403(b)s), life insurance policies, inheritances, or gifts.
Each of these funding sources can be incredibly useful, but also risky if not properly handled. Incorrectly structured assets could unintentionally disqualify your loved one from government assistance. That’s why partnering with professionals who specialize in special needs planning is key to getting it right.
- For many families, life insurance is a practical and dependable way to fund an SNT. Still, understanding the differences between policy types is crucial:
- Term Life Insurance offers lower premiums for a fixed term (10, 15, or 20 years), but renewal costs increase with age.
- Survivorship Policies, which cover two lives (often both parents), are typically more affordable and pay out after both insured individuals have passed, making them ideal for long-term special needs funding.
- Families with larger estates may also consider an irrevocable life insurance trust (ILIT) to shield the insurance proceeds from estate taxes. No matter the approach, both the trust and the insurance policy must be worded and structured carefully to work as intended.
For Laura, the process wasn’t easy, but it was empowering. Families of all income levels can create meaningful, lasting security for their loved ones with special needs. Whether your resources are modest or substantial, thoughtful planning ensures that your loved one’s care and quality of life will continue for years to come.
We’ve made tremendous progress in supporting individuals with developmental disabilities, but awareness of special needs planning is still growing. If you’ve ever found yourself wondering how to balance care, benefits, and peace of mind, now is the time to start.
A conversation with a qualified special needs planning attorney and financial advisor can transform uncertainty into confidence, and ensure that your loved one’s future is every bit as secure and hopeful as you dream it to be.
The information provided is not intended to be legal or tax advice and does not constitute any attorney/client relationship. You should consult with an attorney for individual advice regarding your own situation.
Ms. Melancon is an attorney with Legacy Estate & Elder Law of Louisiana, LLC with offices in Baton Rouge, New Orleans and Lake Charles, LA. The primary focus of her practice is estate planning, probate, special needs planning, and elder law. For more information or to attend an upcoming estate planning seminar, call her office at (225) 744-0027.
