Parents of children with special needs face a unique and urgent set of challenges-especially in today's changing legal and healthcare environment. As your child grows, planning for their future security and well-being becomes one of the most important steps you can take.
Whether your child is a minor or nearing adulthood, your decisions today will determine how they are cared for, supported, and protected long after you're gone.
In 2025, with updated government benefit thresholds, increased healthcare system automation, and aging parent demographics, special needs planning is more critical than ever.
Contact us by either using the online form or calling us directly at 414-253-8500 for legal assistance.
Why Special Needs Planning Is Urgent in 2025
Several factors make this the right time to create or review your plan:
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SSI and Medicaid reviews are intensifying, with more families being penalized for having assets in the child's name.
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AI-driven eligibility systems are flagging minor errors that used to go unnoticed.
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ABLE account thresholds have changed under federal updates, requiring careful asset coordination.
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Many children with disabilities are aging out of school-based services, leaving a gap in care planning.
Without proper planning, your child could lose access to essential government benefits, fall under court-ordered guardianship by strangers, or be left with no financial safety net.
The Risks of Doing Nothing
Even well-meaning parents can unknowingly set their child up for financial harm. The most common mistakes include:
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Leaving money directly to the child in a will or life insurance policy
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Failing to name a legal guardian or standby guardian
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Waiting too long to create a special needs trust
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Not coordinating ABLE accounts with estate plans
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Assuming other family members will "step in" without formal authority
Incapacity, death, or even divorce can leave a vulnerable child without structure or protection unless legal tools are in place.
Legal Tools to Protect Children with Special Needs
1. Special Needs Trusts (SNTs)
Also called a Supplemental Needs Trust, an SNT allows you to set aside money for your child without disqualifying them from government benefits like SSI and Medicaid.
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Funds can be used for housing, therapies, education, transportation, and quality-of-life expenses.
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The trust is managed by a trustee who uses the funds on your child's behalf.
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The child has no direct access to the money, keeping their benefits intact.
There are two main types:
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Third-party SNT - Funded by parents or relatives during life or at death.
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First-party SNT - Funded with the child's own assets (e.g., injury settlements or inheritance), usually with a Medicaid payback clause.
2. ABLE Accounts
An ABLE account allows individuals with disabilities to save up to a federally designated amount per year without affecting their eligibility for SSI and Medicaid. In 2025, the annual contribution limit has increased, making ABLE accounts more attractive-but they must be used strategically.
ABLE accounts are best for:
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Small savings for immediate needs
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Coordinating with a special needs trust to manage larger assets
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Empowering adult children with limited financial control
3. Guardianship and Alternatives
When a child with disabilities turns 18, parents lose the automatic right to make medical, educational, and financial decisions-even if the child cannot make decisions independently. If your child is unable to manage their affairs, you may need to pursue:
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Legal guardianship - Court-appointed authority to make personal, medical, or financial decisions.
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Conservatorship - Often focused on managing finances, depending on state law.
However, less restrictive alternatives may be appropriate for some:
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Supported decision-making agreements
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Durable powers of attorney (if the child has legal capacity to consent)
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Healthcare directives
Choosing the right path depends on your child's unique abilities and level of independence. At Heritage Law Office, we help families evaluate all options to balance autonomy and protection.
4. Letter of Intent
A Letter of Intent is not a legal document, but it's a powerful planning tool. It tells future caregivers and trustees about your child's:
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Medical history
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Daily routines
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Likes, dislikes, fears, and comforts
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Educational background
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Future goals or living arrangements
Think of it as a guidebook for those who may care for your child after you're gone. While not legally binding, it ensures continuity and clarity.
5. Comprehensive Estate Plan for Parents
Your estate plan should coordinate with your special needs plan to avoid benefit loss and family conflict. This includes:
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A will that leaves assets to the special needs trust-not the child
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A revocable living trust to streamline administration
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Updated beneficiary designations on retirement accounts and life insurance
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A legally named guardian and successor guardian
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Coordination with any ABLE accounts or prior trusts
Learn more about our wills and trusts services that support long-term care planning.
When to Start Special Needs Planning
The best time is now. Even if your child is still young, early planning allows:
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Time to fund a trust gradually
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Proper legal guardianship before age 18
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Coordination with family members' plans (e.g., grandparents leaving an inheritance)
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Peace of mind that your child will be protected no matter what
Contact an Attorney for Special Needs Legal Planning
Protecting a child with disabilities takes more than love-it takes proactive legal action. At Heritage Law Office, we help families create clear, comprehensive special needs plans that preserve benefits, protect independence, and provide lifelong support.
Call us at 414-253-8500 or contact us online to schedule a consultation.
Frequently Asked Questions (FAQs)
1. What happens if I leave money directly to my child with special needs?
Leaving money directly to a child who receives government benefits like SSI or Medicaid can disqualify them from those programs, often with devastating results. Instead, funds should be left to a special needs trust, which protects eligibility while still providing financial support.
2. Can a sibling or relative be the trustee of a special needs trust?
Yes. A sibling, relative, friend, or even a professional fiduciary can serve as trustee-but they must understand the rules about how trust funds can be used. Improper distributions could jeopardize benefit eligibility. Many families choose a co-trustee model to balance personal insight with professional administration.
3. What's the difference between a special needs trust and an ABLE account?
A special needs trust is a legal entity that can hold larger sums and be customized for long-term planning. An ABLE account is a tax-advantaged savings account with annual contribution limits (updated for 2025), designed for day-to-day expenses. Most families benefit from using both tools together.
4. When should I set up a guardianship for my child?
If your child will not be able to manage their own medical or financial decisions by age 18, you should begin the guardianship process several months before their 18th birthday. In some cases, less restrictive options-like supported decision-making or POA-may be better. An attorney can help assess what's best for your family.
5. Can grandparents leave money to a grandchild with special needs?
Yes-but they must be careful. Grandparents should never leave money directly to a special needs grandchild. Instead, they can contribute to a third-party special needs trust or an ABLE account set up by the parents. Coordination between generations is critical to avoid benefit loss.