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 supplemental needs trust (sometimes called a special needs trust)?
  • What should I consider when choosing a special needs professional?

Having a child with special needs can bring unique joys and added challenges to your life, as well as complex financial and emotional concerns for you, for your child’s siblings, and for potential guardians of your child. Today, according to Disabled World e-newsletter, about 39.7 million Americans or, 12.6% of the population, qualify as having a disability. And while social attitudes toward disability have changed and have grown more accepting, resources for people with special needs 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 checklist 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 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 government benefits won’t be jeopardized and your own assets won’t be depleted.
  • Designate in writing an advocate/guardian for special-needs family members in the event of your death.
  • Select future living accommodations for aging loved ones and/or for loved ones with disabilities.
  • Prepare a letter of intent for the individual who will be providing for any special-needs family members when you are no longer able to do so.

Financial provisions for loved ones.

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 its website,

Additionally, the Social Security website,, provides information and a comprehensive guide of programs available, Social Security 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 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, 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.

Family long-term planning.

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

A supplemental 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 supplemental 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 supplemental 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 supplemental needs trusts.
  • Knowledge of all types of available government benefit programs, especially Supplemental Security Income (SSI), Social Security Disability Insurance (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 health care 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 or her parent or guardian, including:

  • An individual’s ability to function and/or work independently.
  • The desired lifestyle for a child, and a 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 that 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, 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 want to be 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 the toll-free number 1-800-225-5695 to arrange for a discussion with a New York Life agent or a NYLIFE Securities financial services professional.


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