Financial Planning With Special Needs Considerations

Special planning is required when you have a child with special needs

Whether that child is a toddler, a teen, or an adult, it’s a parent’s job to plan ahead for their special needs child. Admittedly, “special needs” is a broad category and can range from a child with autism to one who is bipolar or addicted to drugs and alcohol.

laughing autistic child

When it comes to financial planning, there are 2 types of special needs we are concerned about.

First, if someone would be eligible for government benefits we want to make sure our planning doesn’t preclude them from eligibility. There are strict rules about how much money one can receive before they lose out on government benefits, and this is a part of where special needs trusts come into play.

Second, some people are just not well equipped to inherit millions of dollars with no oversight. These folks may not qualify for government benefits so their planning is more about protecting them from folks that might prey upon them, or sometimes just protecting them from themselves. This is where lifetime trusts with independent trustees come into play.

One example I can share is a client whose son is bipolar and has a history of making impulsive financial decisions.

His parents are not seeking any form of government benefits; they just want to make sure that when he inherits his share of their wealth that he won’t blow it. We have worked closely with their attorney to design their estate plan in a manner that will allow their son to benefit from his inheritance without having the capacity to waste it or lose it to an unscrupulous person. This type of planning will also protect him in the event that he gets married and later divorced.

If you think your son or daughter could benefit from this type of planning, I have 3 ideas for you to consider:

  • Take action and be responsible. Whatever the problem is, it’s unlikely that it will go away on its own. As a parent, we have the responsibility to look out for our children until the age at which they can lookout for themselves. If your son or daughter has special needs, that age may not come during your lifetime and you need to plan ahead and protect them while you can.
  • Be realistic and somewhat conservative about the amount of help your child needs and for how long. Often times special needs planning is for a person’s entire lifetime, but other times it’s just until the age at which their parents feel they should finally be mature enough to make good decisions.
  • Hire a professional. Sit down with a Certified Financial Planner (CFP®) and discuss your concerns, goals, and financial resources. Most CFP’s will do this on an hourly consultation basis without requiring you to invest your money or buy any insurance from them. From there, your CFP will introduce you to other folks that may need to be a part of your planning team, such as an estate planning attorney and an independent trustee.

If this is something that’s been on your mind and you’ve yet to take action or your plan is stale and needs to be reviewed, send me an email at or give us a call at 925-927-1900.