Get Help Creating a Special Needs Trust to Benefit Your Disabled Loved One
If you have a child, grandchild, or other loved one with a disability, it’s natural to worry about how they’ll be cared for after you’re gone. You want to leave them an inheritance that will improve their quality of life—but you also don’t want to accidentally jeopardize their eligibility for vital government benefits like SSI or Medicaid.
The good news is, with the right special needs planning, you can provide for your loved one in a way that protects their future. We can help you create a plan—such as a special needs trust—that ensures they have the financial support they need while preserving access to the benefits they rely on.
Why Leaving a Direct Inheritance Isn’t a Good Idea
Programs like Supplemental Security Income (SSI), Medicaid, and other government benefits have strict income and asset limits for people with disabilities. While a home, a car, and personal belongings are usually excluded, even a modest cash inheritance can push someone over the limit—making them ineligible for essential financial help and medical coverage. This can be devastating for individuals who rely on costly medications, therapies, or ongoing care.
Even if your loved one isn’t currently receiving benefits, it’s important to plan as though they might in the future. Many disabilities change or progress over time, and government assistance could become critical. By planning ahead, you can provide for your loved one without putting their eligibility at risk.
How a Third-Party Special Needs Trust Can Help
A special needs trust is a powerful tool that allows you to provide for a loved one with a disability without jeopardizing their eligibility for vital government benefits like SSI or Medicaid. The trust—not the individual—legally owns the assets, which can include cash, investments, real estate, and more. There are two main types of special needs trusts:
- First-Party Special Needs Trust Funded with the beneficiary’s own assets, such as an inheritance or legal settlement.
- Third-Party Special Needs Trust Funded by someone else, such as a parent, grandparent, or friend, who wants to provide financial security for the beneficiary.
Third-party trusts are often created as part of an overall estate plan. They can be included in a will (not recommended because of probate), added to a living trust to avoid probate, or set up as a stand-alone trust. Multiple people can contribute to the same trust, or separate trusts can be created for the same beneficiary.
In a third-party special needs trust, a trustee manages the funds and makes distributions to the beneficiary. The trust creator (grantor) can serve as the initial trustee, naming a family member, friend, or professional as a successor trustee. Co-trustees are also an option. However, even if a person with special needs is capable of handling their own finances, they cannot legally serve as both trustee and beneficiary.
The trust’s written instructions determine how funds can be used. While there may be some limitations or issues with them being used for food or shelter (to preserve benefit eligibility), they can cover a wide variety of expenses that enhance the beneficiary’s quality of life—such as education, transportation, hobbies, technology, therapy, vacations, and more.
Let Us Help You Plan for Your Loved One’s Future
People with special needs deserve every opportunity to live life to the fullest. A special needs trust can give your loved one the resources they need to enjoy a high quality of life—no matter what the future brings.
We can help you explore your options, create the right plan, and fund it in a way that preserves essential benefits while providing lasting security. Contact us today to schedule a free strategy session. We meet with families in our Howell office and we also offer convenient virtual consultations anywhere in Michigan.