Families who have a child or relative with special needs often worry about what will happen when they are no longer around to provide care and support. That concern is very real, and the best way to address it is through careful planning. Without a plan, even the most well-intentioned inheritance can cause serious problems for a loved one.
The most common mistake I see is leaving assets directly to a person with special needs. This can cause them to lose vital public benefits such as Supplemental Security Income (SSI) or Medi-Cal. These programs have strict limits on income and assets. A single inheritance check can push your loved one over the limit and disqualify them from benefits.
The right way to protect them is usually through a Special Needs Trust. This type of trust holds funds for the benefit of your loved one, but the assets are not counted against them for government programs. The trustee you choose manages the money and uses it to pay for things that improve quality of life. This might include therapies, educational opportunities, travel, hobbies, or even small comforts that make life more enjoyable. The trust is there to supplement public benefits, not replace them.
Choosing the right trustee is just as important as setting up the trust itself. Some families name a sibling or close relative, but you need to ask whether that person will have the time and judgment to manage the role well. In many cases, a professional trustee or co-trustee arrangement provides more stability.
It is also critical to coordinate the rest of your estate plan. Retirement accounts, life insurance policies, and your will should name the Special Needs Trust as the beneficiary, not the individual. Overlooking this step can undo everything you are trying to accomplish.
I also encourage families to write a Letter of Intent. While it is not legally binding, it serves as a guide for future caregivers. It can describe your loved one’s routines, medical needs, preferences, and values. Many families find it provides peace of mind knowing they have left personal guidance in their own words.
The biggest mistake is waiting until a crisis. Planning ahead gives you control and ensures that your loved one is protected in the way you want. I have seen how much relief families feel once they know the plan is in place. Estate planning for special needs is not just about legal documents. It is about love, responsibility, and providing for the future.