Should I Disinherit My Child with Special Needs and Leave the Money to Siblings Instead?

For many children with special needs, access to government programs is critical to their overall well-being. However, programs like Medicaid and Supplemental Security Income (SSI) are needs-based, and any money given to a child with disabilities could cause them to become ineligible for the benefits he or she depends on.

This presents an issue for parents who want to leave an inheritance to their child with disabilities when they die.  How can they make sure to leave behind enough money and assets to pay for their child’s care, without jeopardizing access to healthcare or other critical public services?

Some parents have been told that the only way to accomplish this goal is to disinherit the child with special needs when they die and instead pass all assets to siblings with the understanding that they will “help” their brother or sister down the road. This is usually not a good idea.

Entrusting a sibling to hold assets for the benefit of a child with special needs could jeopardize the assets all together.  If the sibling gets divorced, gets into an accident, goes bankrupt or is sued, all the money that you expected to be left for the care of your child could be lost. There is also a risk that that the sibling could use the assets for themselves, as nothing could legally stop them from doing so.

No one wants to believe these things would happen, but when it comes to protecting the future of your child with special needs, you simply can’t leave their well-being to chance.

Rather than disinheriting a child with special needs, we recommend that a Special Needs Trust be established for his or her benefit. Transfers to a Special Needs Trust typically will not create any period of ineligibility or cause the child to lose benefits. The assets in a Special Needs Trust can then be used to supplement, not replace, monies available through government assistance, as the inheritance will not be left in the child’s name.

Plus, using a Special Needs Trust guarantees that the funds will be held only for the benefit of the child with special needs and not for other individuals or other purposes, while ensuring that eligibility for government programs is not compromised.

If you would like to learn more about protecting your child’s financial future using a Special Needs Trust, call the Law Office of Sheri R. Abrams at (571) 328-5795 to schedule an appointment.