Overview:
- Planning for your child’s future will involve different tasks at different stages in your child’s life. This article covers what you will need from ages Birth to 12. Part 2 covers the years from age 13 through adulthood.
- This article has information on:
- Legal and informative documents parents may want to create (wills, powers of attorney, letter of intent)
- Financial planning, including options which do not affect your child’s benefits.
- Supporting and protecting your minor child after your death or when you are unable to care for them.
Full Article
Thinking about the future when you will no longer be available to help your child because of death or a condition where you cannot participate in their care can be emotionally difficult. On top of that, this planning process is full of important decisions with significant impacts on your child’s future. To prevent being overwhelmed, it may help to review the entire article, and then tackle the tasks and steps needed to create a plan.
Legal Planning. You will need:
- A will:If you die and either don’t have a will or don’t specify a guardian in your will, the courts will appoint someone, and it won’t necessarily be a family member. It could be a complete stranger. A will usually includes almost all your instructions for how you want your child to be cared for when you die.
- A Letter of intent: It expresses your wishes for your child which are not included in the will. It has no legal standing, but acts as a guide for guardians, Power of Attorney agents, and trustees. It can be provided to your selected guardians and a copy can be saved with the lawyers who helped you set up your will and Powers of Attorney.
- Powers of Attorney (POAs): Create agents, people who can legally act on behalf of your child for financial, health care and other life areas. They are selected by you, for after your death or when you are temporarily or permanently not capable of caring for your child. These agents do not have to be the same people you select as guardians. These are legal documents best prepared with the help of a lawyer and must be notarized.
Wills:
Who will be your minor child’s guardian? What will they need to know about your child?
How will your child be financially supported while a minor? It’s recommended that parents select someone different than the guardians to manage their child’s finances. Think about close friends as well as your parents or siblings. If your child is older, think about adults with whom your child has a bond. This can help if you want your child to continue in their current school, job, or neighborhood.
List each child individually when naming a guardian, and list all your minor children. Probate courts will not assume you want the same guardian for all your children unless you list them that way and might appoint a separate guardian for unlisted children!
For ex: “I/We name Harold and Maude Green as guardians for our minor children Georgia Brown, Michael Brown, and Theodore Brown”.
Important: Do not directly leave your child with disabilities any money or assets in your will. Instead, have that child’s share of their inheritance pass to a Special Needs Trust and/or ABLE Account (as described below). Note that in this situation, it’s good to have a lawyer draw up the will to make sure that the inheritance does not impact your child’s current or future benefits, such as Social Security programs or Medicaid.
Financial Planning
Government Benefits: For the present time, and for your child’s future
Supplemental Security Income (SSI) for your child at any age. The SSI program makes cash assistance payments to aged, blind, and disabled persons (including children) who have limited income and resources. Many states pay a supplemental benefit to persons in addition to their Federal benefits.
People who qualify for SSI may, in some states, qualify for Medicaid health insurance, which is either free or low-cost.
Social Security Disability Insurance (SSDI) program for disabled and blind persons. The amount of the benefit is based on your child’s contributions to Social Security OR based on the parents’ earnings. Your child must meet Social Security criteria for disability.
Social Security Administration provides a useful comparison chart on important differences between the two programs on their Red Book page.
Payments from either program are often not enough to pay for everything your child may need or want, and any money or assets in your child’s name may cause their Social Security benefits, Medicaid coverage, and other benefit programs (supported housing, SNAP /food stamps, etc.) to be cut back or eliminated.
Funding your child’s future directly
Special Needs Trusts and ABLE accounts are ways to provide for your child financially that do not reduce their government benefits. They differ in many ways, with their own pros and cons. You might wish to have both an SNT and an ABLE account based on your family’s circumstances.
An ABLE account is a tax-advantaged savings account that can fund disability expenses. Currently, the beneficiary of the account (the person with a disability) must have acquired the disability before age 26, and this age limit will increase to before age 46 on January 1, 2026. The beneficiary of the account owns the funds. Interest (income) earned by the funds will not be taxed. Anyone can contribute to the account (the individual with disabilities, their family members, friends, or a Special Needs Trust).
The funds in the ABLE account are generally NOT COUNTED as income or assets against an individual’s eligibility for SSI, Medicaid, and other programs with income and asset limits, such as federal student aid, HUD housing programs, and SNAP (food stamp) benefits.
Money from an ABLE account may be used for disability-related expenses to supplement benefits through private insurance, Medicaid, SSI, employment, and other resources. The ABLE National Resource Center gives specifics on ABLE accounts on their website.
Special Needs Trust (SNT): A trust is a legal “tool” for managing funds, and Special Needs Trusts are set up so that the beneficiary of the trust, in this case your child with disabilities, can have the funds used on their behalf. Money in the SNT is not counted against income limits for government benefit programs. You can arrange for the Special Needs Trust to be the beneficiary for life insurance policies and retirement plans. You can let friends and relatives know that they can give or leave money/assets to your child through the trust.
Government benefits will cover most of the basic needs while monies from the trust can pay for your child’s wants. Only a qualified attorney should set up the trust. If it is done incorrectly, your child’s benefits could be at risk.
There are several types of SNTs. The one most commonly set up by parents or guardians for a child is called a third-party special needs trust, which means that the funds in the trust are from someone other than the child. Military parents may designate Survivor Benefit Plan payments to an adult dependent child with disabilities, but only through a first party trust.
NOTE: Unlike ABLE accounts, which were set up according to federal law, there is no “official” source of information on Special Needs Trusts. Many elder and disability law practices will have information on their websites about SNTs. Additional information from disability organizations can be found at:
ARC of the United States: Type “Special Needs Trust” in the search bar to find a large number of articles on the topic, not only for individuals with developmental disabilities.
Military OneSource: Type “Special Needs Trust” into the search bar for military-specific information on SNTs.
It’s important to know that a professional should help you create the SNT. Consult with an attorney with expertise in elder and disability law. When naming trustees, it’s important to not only name yourselves, but to name backup (“secondary”) trustees to cover situations when you are not able to act as trustees. Setting up secondary trustees is separate from setting up agents using a Power of Attorney (POA). The authority of an agent under a POA may not be accepted by the financial or legal organization where the trust funds are held. You may choose to use the same individuals you selected for your financial POA, or different people.
Special Needs Alliance “is a national alliance of attorneys for special needs planning.” They have a directory of attorneys which currently lists two attorneys in Washington State who are members of that organization.
You can search for attorneys with SNT experience through the American Bar Association.
Legal work can be expensive! Here are some resources to seek out free or low-cost help and referrals:
- WashingtonLawHelp.org: This website has articles on topics about future planning, such as wills, guardianship of children and adults, alternatives to guardianship, Powers of Attorney, and information for non-parents raising children along with many others
- CLEAR intake hotline: “CLEAR is the statewide intake line for free and low-cost civil legal aid in Washington. Call 1 (888) 201-1014 or use the online intake form on the website. Seniors (people age 60 and over) can access intake by calling CLEAR*Sr at 1 (888) 387-7111. Veterans may dial 1 (855) 657-8387”.
- ABA Home Front: If you are military, and you do not wish to use your Judge Attorney General (JAG) or they do not have experience with Special Needs Trusts or other future planning when your child has a disability, the American Bar Association has several programs, including free or low-cost options, to locate an attorney or program with a focus on military families. Veterans can get free legal answers on this website, too!
For information on future planning steps in your child’s teen years and through adulthood, see PAVE’s article: What Will Happen When We’re Gone? Planning for the Future for Your Child with Disabilities, Part 2: Age 13 through Adulthood