Planning for the future of a loved one with special needs is emotionally important and legally complex. Families often worry about how to provide lifelong support without jeopardizing eligibility for vital programs like Medicaid or SSI.
In this article, based on our latest video, we break down the most effective tools for building a secure financial future for your child or family member with a disability.
1. Special Needs Trusts (SNTs): Third-Party vs. First-Party
A Special Needs Trust is a legal structure that allows assets to be set aside for a person with disabilities without disqualifying them from public benefits.
- Third-Party SNTs: Funded by parents or grandparents. Assets do not need to be paid back to Medicaid.
- First-Party SNTs: Funded by the beneficiary (e.g., via inheritance or legal settlement). These require Medicaid payback after death.
Tip: Work with a qualified attorney to draft the trust correctly and designate a reliable trustee.
2. ABLE Accounts: Tax-Free Growth
An ABLE Account allows eligible individuals with disabilities to save up to $19,000 per year (2025 limit), and as long as the total balance stays under 100k, it avoids impacting their SSI/Medicaid eligibility.
- Grows tax-free, similar to a 529 account
- Allows for flexible spending on qualified disability expenses
- Can be used in conjunction with a trust for layered planning
3. Life Insurance & Estate Planning
Parents and caregivers should consider:
- Life insurance proceeds to fund a Special Needs Trust. Receiving the insurance outright can impact aid.
- Updated wills and beneficiary designations to prevent assets from going directly to the disabled person
- Guardianship documents if applicable
4. The Letter of Intent
Not a legal document—but possibly the most important. This letter communicates your wishes, care instructions, routines, and preferences to future caregivers and trustees.
5. Avoiding Mistakes That Disqualify Benefits
Well-meaning gifts, inheritances, or incorrect account ownership can cause loss of SSI or Medicaid. Planning proactively can help avoid these common pitfalls.
Conclusion
When done right, financial planning for special needs isn’t just about money—it’s about providing stability, independence, and dignity.
📺 Watch the full video here:
👉 Special Needs Trust & ABLE Accounts
Need help setting up a plan? Schedule a free consultation with Brennan Decima, CFP®, and take the first step in protecting your family’s future.
The information provided in this article is for educational purposes only and should not be construed as legal, tax, or investment advice. Decima Wealth Consulting, LLC offers financial planning and investment management services. You should consult with a qualified attorney or tax advisor regarding your specific situation, particularly when setting up a Special Needs Trust or ABLE account. Investing involves risk, and past performance does not guarantee future results.
