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New York Life Insurance Company
6mo New York, NY, United States Story
Special needs children need care and support--and so do their families

Tips, trusts, and other potential solutions for families with special needs children.

A trust is only the beginning: Here’s what else you can do to help protect and care for a special needs child.

Caring for a special needs child can bring unique joys to your life—as well as a number of financial and emotional concerns. Fortunately, there are a host of support programs and existing resources in place—such as Special Needs Trusts—that can make it easier for you to give your child a secure and fulfilling life.

Feeling overwhelmed? This caregiver’s checklist may help.

So where do you start as you think about providing for a special needs child? A basic checklist of “to dos” can help organize immediate goals and provide a framework, no matter the age of your loved one.

The Special Needs Network, a nonprofit group providing professional services to special needs families, suggests the following:

  • Apply for all state and federal government programs on behalf of family members with disabilities.
  • Make certain that, when you pass away, there will be adequate funds available to provide for family members. Be sure to properly safeguard assets so that government benefits will not be jeopardized or depleted.
  • Designate in writing an advocate/guardian for children or family members in the event of your death.
  • Select future living accommodations for aging and/or loved ones with a disability.
  • Prepare a Letter of Intent for the individual who will be providing for any family members when you are no longer able to do so.

Here’s how to find the financial resources you need.

The financial demands of any specialized care may be immediate and intimidating. They may be even more so if either you or your spouse need to leave the workforce to care for a loved one with special needs. Therefore, exploring federal and state programs is imperative; the National Institutes of Health (NIH), for instance, provides significant resources and informative links on their website,

Additionally, the Social Security website,, provides information and a comprehensive guide of available programs, their guidelines and eligibility, and how to apply for benefits on behalf of adults with special needs.

Medicaid and Medicare may also be options, depending on the severity of the disability. Medicaid, in particular, is designed for those people meeting strict income eligibility requirements and, while federally subsidized, the program itself is state-administered.

Medicare is run by the Social Security Administration and may pay the health costs of people older than 65, as well as those younger than 65 who have received Social Security benefits for at least two years.

If you’re considering federal programs, then you’ll need to be aware that the asset cap—applicable to the special needs individual—is $2,000. Because of these asset limitations, you’ll need to inform family members and guardians that their financial bequests, through wills, gifting, or life insurance beneficiary designation, can compromise your child’s ability to receive federal aid.

Long-term planning protects your family’s lifestyle and future.

Fortunately, there are solutions to asset-limit challenges, such as a Special Needs Trust. This is why any asset limitations should not deter parents from establishing basic financial contingencies within a legal framework.

A Special Needs Trust may help alleviate financial and quality-of-life concerns without rendering your loved one ineligible for federal and state aid. Such a trust—indicated in your will—can be funded through assets such as stocks, real estate, and bank accounts. In addition, for those with limited assets or guardians who want to ensure that a trust has more than adequate funds, a life insurance policy can also be used to fund a Special Needs Trust, if you name the trust as beneficiary. When the policyholder passes away, the death benefit of the policy and any other assets indicated would revert to the trust, which can be used as an income source for your loved one'’s expenses. A trustee other than your loved one must be named who can manage the trust. When considering methods to fund the care of an individual with special needs, familial financial situations must be carefully reviewed by an attorney specializing in special needs law. All beneficiary designations need to be reviewed and, if necessary, changed to specify the trust.

Find proven, experienced professionals.

Developing a comprehensive plan for the care of an individual with special needs requires a careful choice of professionals, be they lawyers, accountants, health professionals, or insurance agents.

Because of the complexity involved in developing a Special Needs Trust and evaluating familial assets, any professional you contact should have the following:

  • Experience in special needs planning, with references available.
  • An understanding that both federal and state laws affect the drafting of Special Needs Trusts.
  • Knowledge of all types of available government benefit programs, especially Supplemental Security Income (SSI), Social Security Disability Income (SSDI), Medicaid, and Medicare.
  • An understanding of state-specific Medicaid benefits.
  • Knowledge of the fundamentals of estate planning, including wills, trusts, powers of attorney, and health care proxies.
  • An up-to-date understanding of recent changes in estate tax laws that could impact planning.
  • Advocacy referrals to assist clients.

Be sure to understand, and account for, all potential costs.

A knowledgeable professional should also be able to help determine the anticipated costs associated with the care of an individual with special needs based on variables determined by his/her parent or guardian, including:

  • An individual’s ability to function and/or work independently.
  • The desired lifestyle for the child, and summary of attendant monthly expenses that would go uncovered by government programs or private insurance.
  • Future monthly housing, educational, recreational, and medical costs.
  • A cost estimate of anticipated additional support and finances needed, such as counseling or advocacy services.
  • Government benefit eligibility, likely duration of eligibility, and expected aid amounts.

Select a legal guardian—in case you are gone.

Guardianship is another pressing issue for people currently caring for an individual with special needs. Often, siblings, aunts or uncles, or your child’s grandparents are the first choice. The role, however, requires a substantial amount of consideration, as guardianship practices vary by state and there is no unifying federal guideline on which to rely.

Additionally, depending on state-specific guidelines, guardianship may result in a special needs adult losing any right—even limited—to self-–determination regarding medical care, housing choices, etc. A lawyer specializing in family law, therefore, should always be consulted and involved in the drafting of any binding documents.

A Letter of Intent, drawn up by the parent or guardian of a special needs individual, comprises instructions to a trustee or guardian regarding the type and level of care you would want provided, and can include specifics about health care, education, and living arrangements. While not a legal document, Letters of Intent should be witnessed and notarized.

Give yourself, and your special needs child, the peace of mind you deserve.

Caring for an individual with special needs requires patience, dedication and, most importantly, love. Ensuring the continued well-being of your child, in the event you are no longer able to provide care, is one of the most important steps you can take. By laying the groundwork early and taking advantage of available resources, you can minimize the worry of caregiving and enjoy its rewards.

Do you have questions about this article or New York Life, our subsidiaries, and products we offer? Simply use the “Talk it through with an expert” form on the page, and an agent will contact you at your convenience.

Neither New York Life Insurance Company nor its agents provide legal or tax advice. Please contact your legal or tax advisor to find out whether the general information in this article applies to your personal circumstances.

Talk it though with an expert.  Click here to get started.

New York Life is a trusted and valued partner to millions of policyholders and customers, guided by our values of integrity and humanity. New York Life is a Fortune 100 company and the largest mutual life insurance company in the United States. Headquartered in New York City with regional hubs and [...]

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