Raising a child with special needs comes with immeasurable love and joy — along with unique challenges. Among those challenges is the important task of planning for your child’s long-term financial security and care. While every family situation is different, there are several key financial and legal tools that can help ensure your child is protected, both now and in the future.

1. Understanding Government Benefits

Many children and adults with special needs qualify for government benefits such as Supplemental Security Income (SSI) or Medicaid. These benefits can provide crucial support, but they come with strict income and asset limits. A well-intentioned gift or inheritance, if not structured properly, can disqualify a child from these programs.

To avoid that, families often turn to special needs trusts and ABLE accounts, which allow assets to be used for the benefit of the child without jeopardizing eligibility.

2. Special Needs Trusts

A Special Needs Trust (SNT) is a legal structure that holds money for a child’s benefit without counting as a personal asset. Funds in the trust can be used for things like education, medical expenses not covered by insurance, transportation, and recreation.

There are two primary types:

• Third-party SNT – Funded by someone other than the child (like parents or grandparents) and often used for estate planning.
• First-party SNT – Funded with the child’s own assets (such as a legal settlement or inheritance) and subject to Medicaid payback provisions after death.

Working with an experienced attorney is key to setting up and maintaining a compliant trust.

3. ABLE Accounts

An ABLE (Achieving a Better Life Experience) account is another tool that can help. It’s a tax-advantaged savings account for individuals with disabilities that doesn’t affect SSI or Medicaid eligibility (up to certain limits). ABLE accounts are easier to manage than a trust and can be used for a wide range of qualified expenses.

To be eligible, the child’s disability must have begun before age 26 (soon to be raised to 46 under new rules taking effect in 2026). Most states offer ABLE programs, and you don’t have to use your own state’s plan.

4. Guardianship and Legal Authority

As your child reaches adulthood, you’ll want to consider what level of support they may need legally. In some cases, full or limited guardianship may be appropriate, which allows a parent or guardian to continue making decisions for their adult child. In other cases, tools like a power of attorney or health care directive may be enough.

The right choice depends on your child’s level of independence and should be made thoughtfully, ideally with professional guidance.

5. Letter of Intent

A Letter of Intent is not a legal document, but it’s one of the most personal and helpful pieces of planning. It outlines your child’s routines, preferences, medical history, and hopes for the future — a guide for future caregivers if you're ever unable to provide care yourself. It’s a living document and can be updated over time.

6. Building a Team

You don’t have to do this alone. A good planning team may include:

• A financial planner who understands special needs planning
• A special needs attorney familiar with local laws
• Your tax professional
• Family members or trusted friends who may play a role in the future

Together, they can help you coordinate a plan that balances today’s needs with long-term peace of mind.

Final Thoughts

Caring for a child with special needs involves heart, resilience, and foresight. Thoughtful financial and legal planning may not remove the challenges, but it can help you face them with greater clarity and confidence — and ensure that your child has the care, resources, and dignity they deserve throughout life.

Resources to Explore

• The Arc: Advocacy and family support for individuals with intellectual and developmental disabilities
• ABLE National Resource Center: Information and comparison tools for ABLE accounts
• Special Needs Alliance: Directory of attorneys and planning resources