Overview of Special Needs Planning

What is it?

Children with special needs, whether they be cognitive, physical, or mental, require different levels of care. Additionally, parents of children with special needs have to plan their finances, not just for their lifetimes, but for the lifetime of their special needs child as best they can. This entails planning for financial resources for the child as best as possible, as well as holding those assets in such a way that the child is not disqualified from available government and community benefits, such as Supplemental Security Income.


Why’s it important?

Special needs children are eligible for certain government and other benefits. A child inheriting money and/or other assets could be disqualified from those benefits, or have them reduced. Proper financial planning eliminates the threat of losing those benefits while still having resources, outside of those funded through the government, available for the child’s life.


How is it done?

Planning resources for the child include tools such as insurance, savings, and investments. To pass those onto a child there are a couple of options available: a Supplemental Needs Trust, also referred to as a Special Needs Trust, and a 529 Able Account. This is a new option that was approved by Congress and are based on Section 529 of the Internal Revenue Code. It has features similar to a 529 College Savings account. Both of these tools can be used to pass or provide money and other assets to special needs children without disqualifying them from government funded benefits.


As an introduction to Special Needs Financial Planning, we hope you find this informative. If you have questions, or would like to discuss this topic in greater detail, give us a call. We’d love to help you with this.

Categories: Wealth Advisors

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Aaron Henderson