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Special Needs: Caring for Loved Ones under Unique Circumstances

What Does This Article Cover?
  • What kind of government aid is available to assist with caring for individuals with special needs?
  • What is a special needs trust?
  • What should I consider when choosing a special needs professional?

It's a maxim of parenthood that having a child changes your life. Having a child with special needs brings added challenges and unique joys. It also brings complex financial and emotional concerns — for parents, siblings, guardians and other loved ones of those with special needs. 15% of American adults qualify as having a disability, as do 6.1% of children under the age of 18. This translates into 42 million adults and 4 million children with special needs that almost always will stretch over the course of their lives. And while social attitudes towards disability have changed and grown more accepting, resources for loved ones remain scarce.

What You Need to Begin
So where do you start as you think about providing for a loved one with special needs? A basic check–list of "to dos" can help organize immediate goals and provide a framework, no matter what the age of your loved one. The Special Needs Network, a non–profit 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.

Financial Provisions for Loved Ones
Government Aid The financial demands of any specialized care may be immediate and intimidating. They may be even more so if one parent or spouse must 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) provides significant resources and informative links on their web site,

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

Medicaid and Medicare may also be options, depending on the severity of the disability. Medicaid is designed for those people meeting strict income eligibility requirements and, while federally subsidized, it's 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.

Anyone considering federal programs must be aware that the asset cap — applicable to the special needs individual — is $2,000. Because of these asset limitations, guardians must make any family member — aunt, uncle, sibling, grandparent — aware that financial bequests, through wills, gifting or life insurance beneficiary designation, can compromise an individual's ability to receive federal aid.

Family Financial Planning
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.

Choosing a Special Needs Professional
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.
  • A knowledge of the fundamentals of estate planning, including wills, trusts, powers of attorney and healthcare proxies.
  • An up–to–date understanding of recent changes in estate tax laws that could impact planning.
  • Advocacy referrals to assist clients.

Assessing the Costs of Care
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 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.

Guardianship and Care of Individuals with Special Needs
Guardianship is another pressing issue for people currently caring for an individual with special needs. Often siblings, aunts or uncles, or the child's grandparents are the first choice. Guardianship, however, requires a substantial amount of consideration. 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 draft any binding document.

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.

Allaying Concerns
Caring for an individual with special needs requires patience, dedication and, sometimes, unique skills. Ensuring the continued well being of your loved one, 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.

Questions about this article or about New York Life, our subsidiaries and products that we offer? Please call this toll-free number 800-710-7945 (x951) to arrange for a discussion with a New York Life agent or a NYLIFE Securities financial services professional.

This material is for informational purposes only. Neither New York Life nor its agents provide tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.

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Special Needs: Caring for Loved Ones under Unique Circumstances

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