What Parents Should Know About Special Needs Estate Planning

What to Look for in Special Needs Estate Planning: A Guide for Parents

Life as a parent is busy. Between school drop-offs, after-school activities, work, and everything else on your plate, it can feel like there’s never enough time in the day. Estate planning may not be something you’ve thought much about, but it’s particularly important for families raising a child with special needs.

That’s because parenting a child with special needs often comes with extra layers of planning, advocacy, and care. Whether you’re seeking an initial diagnostic evaluation or your child is already receiving services like Applied Behavior Analysis (ABA) therapy, you may find yourself asking bigger questions about the future:

How can I make sure my child has access to government benefits?
What happens when they turn 18?
Who will help my child if I’m not around?

These are tough but important questions, and that’s where special needs estate planning comes in. To help families better understand the process, we spoke with Kate Devine Schye, a partner at Clancy & Associates and a former Westside parent herself.

Below, we’ll walk through what special needs estate planning is, why it matters, and what families should consider as they plan for the future.

What Is Special Needs Estate Planning?

At its core, special needs estate planning is estate and family planning tailored for families who have a child with disabilities. Like traditional estate planning, it covers wills, trusts, and guardianship, but with an added layer of protection to ensure your child continues receiving the care and resources they need without jeopardizing their eligibility for benefits.

“Estate” might sound fancy, but it just means what you own (your home, savings, belongings) and what you owe (like loans or credit cards). Estate planning is simply making a plan for those things and making sure your child is cared for.

Most families think of estate and family planning as setting up their will, and this is certainly important. However, special needs families have some additional considerations. Even if nothing happens to the parents, it’s important to plan for what happens when your child turns 18, as this is when they may become eligible for government benefits.

Government Benefits

When your child reaches adulthood, an important milestone comes into play: eligibility for government benefits. These programs are designed to give individuals with disabilities the financial, medical, and long term supports they need to live safe, healthy, and meaningful lives.

Two of the most common benefits are Supplemental Security Income (SSI), which helps cover basic living expenses, and Medicaid, which can provide health coverage, therapies, programs, and long-term supports. To qualify, your child must have a disability that prevents them from working full-time (as determined by Social Security) and have limited assets (under $2,000 to their name).

This is where planning really matters. A well-intentioned gift or inheritance placed directly in your child’s name could accidentally push them over the limit and cause them to lose eligibility for these benefits. Special needs estate planning helps prevent that by making sure any resources you leave behind add to your child’s support rather than replace it.

Think of it as creating a safety net: government benefits form the foundation, and your planning adds an extra layer of security, comfort, and opportunity for your child’s future.

Why Special Needs Estate Planning is So Important

Without a plan, the future can feel uncertain. Kate explained that parents often feel relief after completing this process because they know:

How to preserve their child’s eligibility for government benefits.
Trusted people will step in to help when needed.
The family has a clear plan that can adapt as their child’s needs change.

Many parents say they feel a huge weight lifted once this process is complete. As Kate shared, “Having a backup plan brings parents tremendous peace of mind. None of us know exactly what the future holds, but knowing there’s a framework helps families breathe easier.”

Key Pieces of Special Needs Planning

Here are some of the most important elements families should know about:

1. Special Needs Trust

A special needs trust is a legal tool that protects your child’s inheritance or assets without affecting their eligibility for government benefits like SSI or Medicaid.

Instead of money being placed directly in your child’s name, which could disqualify them from benefits, the trust holds and manages funds on their behalf. It also allows you to name trusted family members or friends to help oversee not only finances, but also your child’s ongoing care and support.

2. Guardianship vs. Power of Attorney

When a child turns 18, they legally become an adult – regardless of disability. That means parents no longer have automatic decision-making authority. It’s important for families to know about two common tools to help:

Guardianship: A court process where parents (or another trusted adult) are legally appointed to make decisions for a child who lacks capacity to make their own. This is often necessary for individuals with more profound disabilities.
Power of Attorney (POA) for Healthcare and Finances: A more flexible option, often used when a young adult is able to make some decisions but still needs parental support with certain decisions. With POA, parents can continue helping with things like medical appointments, school, or finances.

3. Government Benefits

Eligibility for benefits like SSI and Medicaid depends on both the child’s disability and financial resources. Two important points:

Children cannot have more than $2,000 in their own name to qualify. Money placed in a special needs trust does not count against this limit.
The best time to apply for SSI and Medicaid is at age 18, when families have the most documentation (like IEPs and medical records) to provide evidence of their child’s disability for the application.

Kate stresses the importance of keeping complete records of your child’s IEPs, 504 plans, evaluations, and reports. These records are critical when applying for benefits, as they provide evidence of the child’s disability and the supports put in place throughout the student’s education.

4. Wills and Family Planning

Every family, whether or not they have a child with special needs, should have a will in place. For families of children with disabilities, wills can also include provisions that direct assets into a special needs trust.

Without a will, the estate goes through probate, a court process that can take years and cause additional stress during an already difficult time.

Planning for Every Stage of Childhood

Families typically start this process at different points:

Some come in when their child is very young (even under age two).
Many start planning during the teen years, especially between 16–18, when big milestones like adulthood and benefits applications come into play.

Thinking about these topics can feel overwhelming, but you don’t have to figure it all out at once. Many parents start by taking just one small step, like setting up a consultation or organizing important school records. Over time, those steps add up to a solid plan. Clancy & Associates offers a checklist of what to consider at different ages:

Early Childhood (0-12 years)

Register your child on the PUNS list.
Keep complete records of individualized education plans (IEP), diagnostic reports, and professional reports.
Do not open financial accounts or purchase savings bonds in your child’s name.
Establish a relationship with a qualified Special Needs Planning Attorney.
Focus on therapies, services, and a well-developed IEP.
Consult with a financial planner for long-term savings options.

The Teen Years (13-16 years)

Verify your child’s PUNS registration is current.
Encourage and incorporate “work” experiences at school via the IEP.
Ensure your child does not have assets exceeding $2000; if so, discuss this immediately with your Special Needs Attorney before transferring any funds.
Consult with a Special Needs Planning Attorney to evaluate government benefit eligibility.
Collect documents and diagnostic reports to prepare for SSI Application.
Begin Transition Planning with your IEP Team when your child is 14 ½.
Prepare a Special Needs Trust and your own Estate Plan.

Reaching Adulthood (17+ years)

Confirm your child’s assets do not exceed $2000; if so, contact your Special Needs Planning Attorney immediately.
Confirm your child’s registration on the PUNS list is current; consider changing their category to “seeking services.”
If you receive child support and plan to apply for SSI, consult with your Special Needs Attorney prior to SSI application.
Meet with your Special Needs Attorney to review the following transition topics:
- Determine if Guardianship or Powers of Attorney is appropriate.
- Evaluate the IEP/Transition Program for alignment with your goals and future plans for your child.
- Enroll in Medicaid (approval is automatic if SSI approved).
- Prepare for SSI application.
- Review and/or update Special Needs Planning.

This roadmap helps parents see the bigger picture while breaking it down into manageable steps. To learn more about special needs estate planning or to schedule a complimentary phone consultation, contact Clancy & Associates here.

Final Thoughts

Whether your child is a toddler just beginning services, a teen approaching adulthood, or a young adult finding their way, special needs estate planning can help you prepare for the future. And while planning for tomorrow is essential, so is making sure your child has the right support today.

That’s why Westside Children’s Therapy offers comprehensive pediatric therapy, including Applied Behavior Analysis (ABA) Therapy, ABA Programs, Occupational Therapy, Physical Therapy, Speech Therapy, Feeding Therapy, Counseling, and Diagnostic Testing.Please contact us to learn more about our offerings. We’re happy to answer any questions you have and help you get started.