I cannot think of many equivalent examples of selfless, often thankless service than that rendered by parents of children with disabilities. Parents and grandparents of children with special needs are very well accustomed to paddling upstream in order to get their loved ones opportunities similar to those that come to most children and families automatically. For many parents the expectation of seeing their child leave the nest and start a family or build a life of their own must be tempered and even abandoned in some cases. In cases where a child will need care into adulthood, special legal precautions must be put in place

For many children with special needs, gainful employment simply is not a reality, luckily Federal and State Government assistance programs fill part of the gap with low or no cost medical insurance through Medicaid and sometimes a monthly living stipend through Supplemental Security Income (SSI). These programs are available to those individuals who have less than $2,000 in assets (not including parent’s assets) and meet income eligibility requirements.

Potential problems arise when parents or grandparents pass and leave these children inheritances that push the net worth over $2,000. Without proper estate planning a transfer of this kind can cause the loss of government benefits until the inheritance is spent down. Luckily, there are several tools available to prevent this scenario.

First, a special needs trust can receive an individual’s inheritance and supplement rather than replace government benefits. These trusts must be established by an expert in the field because of the strict law surrounding them. Another tool is the ABLE account. ABLE accounts are special tax-free accounts that allow individuals with special needs to keep their own funds in excess of the benefit asset limits. The money in these accounts may be used for a variety of purposes related to a person’s disability such as rent, travel, etc. ABLE accounts are very inexpensive to set up and maintain. The account can hold up to $100,000 total and receive a maximum contribution of $14,000 per year. This is a major development for those hampered by the $2,000 asset limit.

Parents and grandparents of children with special needs have to think a lot harder about how to care for their loved ones when they pass. Fortunately, there are flexible tools available to help them meet these challenges.