Special Needs Trusts and Estate Planning

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We routinely assist families with relatives who may have a disability or special need to deal with passing money and property and caring for that loved one. That is only one aspect of special needs planning. Another aspect comes into play regularly when a disabled person receives a backpay of social security benefits which can be in the range of tens of thousands of dollars or receives a personal injury settlement. These lump sum influxes of money can adversely affect Social Security Income, Medicaid or other benefits. Below we will address both these scenarios.

Leaving Assets to Disabled Child:

Special considerations should be made when leaving assets to a disabled child who is on a benefit like Social Security Income (SSI) benefits which comes with a Medicaid healthcare component for individuals who many times have elevated healthcare costs. SSI benefits are subject to means testing which has strict limits on how much money and property you may have in your name. Special needs planning can help with this situation. Your will may be structured to provide for the disabled child or other disabled family member by leaving them money and property through the will. This can, however, cause problems for the disabled individual receiving that inherited property by placing them over-resourced for their benefits. Being over-resourced can cause those benefits to be interrupted or discontinued. A parent, grandparent or guardian may consider setting up a Special Needs Trust for the disabled child, grandchild or relative. A Special Needs Trust allows for money to be kept in the trust and spent on the disabled relative without being a countable asset to that disabled person which would endanger their benefits. The money kept in the special needs trust may be spent on the needs of the disabled relative to improve their life.

What if as disabled person receives Social Security Back-Pay or a Personal Injury Settlement?

It happens more often than you may think. Someone with a disability receives social security backpay because of a change in rules or being inadvertently shortchanged on their social security benefits for years. When a disabled individual dependent on benefits like SSI and Medicaid receive lump sum cash payments the blessing can quickly turn into a curse. The money coming in can place that individual in a financial situation where they are over-resourced for the benefits they depend on for shelter and healthcare. A Special Needs Trust can be created to house the lump sum incoming funds and allow for the trustee to provide for the additional needs of the disabled person.

Special needs planning can be complicated and Special Needs Trusts can be tricky to set up so we strongly suggest consulting a professional familiar with special needs trusts and special needs planning to weigh your options and develop the best plan for your family. We at McIntyre Elder Law regularly help families and individuals with special needs and these types of situations. We can help craft a strategy that is right for you and your family. Have a question for us? Want to set up a FREE CONSULT? Contact us today at 704-749-9244 or online at


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Greg McIntyre Elder Law Attorney

Greg McIntyre Elder Law Attorney

written by:

Greg McIntyre

Elder Law Attorney


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