Special Needs Planning: Straightforward Answers You Need

What is Special Needs Planning?

At Monteforte Law, we work with a lot of families who have a loved one with special needs. And if you’re reading this, there’s a good chance you do too. We also know that when it comes to planning for that loved one’s future, the questions start piling up fast.

"What happens to their government benefits if I leave them money?"

"What kind of trust do I need?"

"What happens when I’m gone?"

If those questions have been weighing on you, I’ve got some answers, not legal jargon, just straight talk. Because at the end of the day, this is about more than paperwork. It’s about peace of mind. It’s about knowing that if something happens to you, your child, or loved one, they're going to be okay.

Let’s dive into the most common questions we get when it comes to special needs planning, and why, in my opinion, this kind of planning is one of the greatest gifts you can give your family.

A// Special needs planning is a specific form of estate planning that focuses on protecting individuals with disabilities, whether that’s a child, sibling, or another loved one, both financially and medically. The goal is to provide lifelong care and support while preserving access to vital government benefits like Supplemental Security Income (SSI) and Medicaid (called MassHealth here in Massachusetts). Without the right plan in place, families often discover (too late) that their good intentions, like leaving money to their disabled child, can have devastating consequences.

A// This is probably the #1 planning mistake I see, and it’s almost always made with love. Parents want to make sure their child is cared for, so they leave them money. But if that child is receiving means-tested benefits (like SSI or Medicaid), the inheritance disqualifies them almost immediately. In Massachusetts, a disabled person can’t have more than $2,000 in countable assets and still receive SSI. One wrong step, and the benefits are gone. Even worse, in order to fix the problem, the family may have to go to court and set up a “first-party” trust that’s subject to Medicaid payback rules.

Bottom line: Without the right structure, a well-meaning inheritance can do more harm than good.

3. How do I leave money to my child without ruining their benefits?

A// Simple: you don’t leave the money to them, you leave it for them. The right way to do that is with a Special Needs Trust (also called a Supplemental Needs Trust). This is a legal tool that holds assets for the benefit of your loved one without counting against their eligibility for government programs.

It’s a win-win. They get access to resources that improve their quality of life, and they get to keep the benefits that cover critical care and housing.

A// Here’s where families breathe a little easier.

A properly structured Special Needs Trust can pay for:

• Additional therapies
• Private caregivers or aides
• Educational programs
• Transportation (including wheelchair-accessible vehicles)
• Travel and recreation
• Medical equipment not covered by insurance
• Home modifications
• Case managers or advocates
• And much more

The trust is designed to supplement, not replace, what government benefits provide.

That means your child can live with dignity and comfort, and you can rest easier knowing they’re supported.

A// A first-party trust is funded with money that already belongs to the disabled person — maybe from an inheritance they received directly, a legal settlement, or even a bank account in their name.

These trusts are subject to Medicaid payback, which means when your loved one passes away, any money left in the trust has to go back to the state to repay the cost of care. A third-party trust is funded by someone else, typically a parent, grandparent, or other relative, and is the preferred option in most cases.

The biggest advantage of a third-party trust? No Medicaid payback. You control where the money goes after your child passes, and it can stay in the family.

6. How do I make sure there’s enough money in the trust?

A// Great question. A trust without funding is like a car with no gas — looks nice, but it’s not going anywhere.

The most effective way to fund a Special Needs Trust is through life insurance. Specifically:

• Second-to-Die (Survivorship) Life Insurance: Pays out after both parents pass. It’s more affordable than you might think and guarantees there’s money to support your child, even after you’re gone.
• Guaranteed Issue Policies: No medical exam required. A good option if health issues would make traditional policies too expensive.

We help families set up insurance policies that are payable directly to the trust. That way, the funds are protected from probate, estate taxes, and benefit disqualification.

A// In addition to the trust and life insurance, we make sure families have:

• A Will that coordinates with the trust
• Durable Power of Attorney to allow someone to manage finances if you become incapacitated
• Health Care Proxy and HIPAA Release
• Guardianship nominations
• Letter of Intent (a non-legal document that tells future caregivers about your child’s needs, preferences, routines, and goals)

At Monteforte Law, we call this full approach Wealth Preservation Planning — because it’s about preserving not just money, but quality of life.

A// Yes, and many parents do. That said, we often recommend naming a successor trustee (or a co-trustee) who can step in when you’re no longer able to serve. Some families use professionals, banks, or even nonprofits as trustee if they don’t have a trusted family member to take over. Whatever you decide, we’ll help you find the right fit.

A// Now. I know, life is busy. You’re juggling school, therapies, IEP meetings, doctors, and a million other things. But here’s the truth: The earlier you plan, the more options you have. You can set things up gradually. You don’t need to be a millionaire. And planning now prevents a crisis later. Trust me — the “perfect time” never comes. You just have to take the first step.

A// I hate answering this one, but you need to know.

• If you pass away without a plan:
• Your child could lose their benefits
• Siblings may be forced to step in, even if they’re not ready or willing
• The court may appoint a stranger to make decisions
• Your assets may go through probate and get tied up for months
• Your child’s care could fall apart

It’s not fair to them. And I know you don’t want that.

11. Am I a bad parent for waiting this long?

A// Absolutely not. You’re here. You’re reading this. You’re taking action. That makes you a hero in my book. Not all heroes wear capes, some show up to a webinar, ask hard questions, and build a plan that protects the people they love the most.

12. What’s the next step

Don’t wait to get the answers you need. Claim your spot in our free webinar, Estate Planning for Families with Special Needs, today!