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Should You Leave Assets to a Loved One with Special Needs?

October 18, 2021

By: Lisa Ashcroft, Vice President and Wealth Trust Advisor, CTFA


Couple discussing financial plans.


For more than 20 years, I’ve been fortunate to work with families who have children and adults with special needs. It is heartbreaking work at times because I am witness to the day-to-day challenges of life with a disability and for those providing their care. It is a 24/7 job that lasts a lifetime. Many times, one or more family members are unable to work because of unexpected medical complications or finding the right in-home care. If there are other children in the home, often they can feel neglected, which causes other family issues. But despite all these challenges, what I also see is unwavering love, patience and strength that is nothing short of miraculous. It’s a humbling experience to see what families overcome to do all the little everyday things I take for granted.


The second thing I’ve learned is once the day-to-day care is under control, there are other worries that never leave the back of every caretaker’s mind:

“What happens when I’m gone?”

“Who will care for them like I do?”

“Who can I trust?”

“How can I be sure they’re safe?”

A family’s first instinct is to create an estate plan ensuring all of their remaining assets are left to the disabled individual. They hope it will provide the means to hire excellent care, whether it’s through independent living, a group home facility, or an institution. It is common to find parents leaving assets disproportionately to children with special needs because they, “need it more.” Friends and relatives will gift or bequest what they can because they feel, “it’s the least they can do.” But are all these well intended actions potentially negatively impacting their loved one’s financial future?


Federal and state governments have benefit programs designed to help provide for those with disabilities. If an individual qualifies, they will be eligible to receive these benefits for life. These benefits will not satisfy all their needs, but it will help and when you have lifelong disability, every bit counts.

However, if you gift or leave assets to your loved ones directly, your well-intended support could disqualify or reduce the benefits available to them. Below is a brief overview of the government benefits available and which ones are tied to a person’s resources or income.


These benefits are available through the United States Social Security Administration.

Supplemental Security Income “SSI”

This is a needs-based benefit meaning you must show both a medical and financial need before you are eligible to receive any benefits. Applicants must be at least 65 years of age, blind or disabled, and have low income and/or resources to qualify. Even if a person does qualify, the maximum benefit is currently only $794 a month and it can be used for certain expenses like food, shelter and clothing.


Social Security Disability “SSDI”

This is not a needs-based benefit, instead it’s considered an earned-benefit where the amount you receive is based on how long you have worked, paid Social Security taxes, and when you became disabled. To qualify, your disability must keep you from participating in gainful employment for a full year. This benefit is typically higher than SSI if the individual has a long work record. However, if a person has been disabled since birth or hasn’t been able to work long enough to build a record, this benefit falls short.



This federal benefit is not tied to your income (so you do not have to show a need before you qualify) and provides the same medical benefits it would to those without a disability. Services a person receives does not have to be related to a person’s disability in order to be covered. If you have been receiving SSDI payments for 24 months, you are eligible for Medicare even if you are under the age of 65.



Medicaid and Long-Term Care “Waiver” Programs

Medicaid, also known as Medical Assistance, provides medical insurance and mental and physical health services to disabled individuals. The qualifications are the same as SSI, so it is a is needs-based benefit. The program varies state-to-state so it’s important to check with your state’s government website for details. In Pennsylvania, you need to file an application with the Department of Human Services to see if you qualify. In addition to traditional Medicaid, a person may qualify for a long-term care “waiver” program. There are many different types and options available that can help with a variety of needs including in-home care, transportation, and meal services.


A properly drafted Special Needs Trust will, in effect, allow you to leave assets to the trust itself, rather than to the disabled individual, so the beneficiary still qualifies for government assistance. The assets inside the trust can then be invested, so that they can continue to grow in value and provide needed funds for future care. A trustee is chosen to administer the trust and has a fiduciary duty to carry out the terms of the document appropriately and put the needs of the beneficiary first. In certain cases, the court oversees the activity in the trust to assure the disabled individual’s needs are being properly addressed. The beneficiary may also gain a benefit from the trust under certain conditions.

A Special Needs Trust is an effective and powerful tool to ensure your loved one gets the most support and care available to them. It can give families peace of mind knowing that they are maximizing the resources available to their loved one. However, the rules are complicated, and the process is overwhelming at best. It’s critical you consult with an experienced professional to help you make the correct choices for you and your loved one. The advisors at Girard can help navigate your options and create a plan.

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This article is for general information purposes only and is not intended to provide legal, tax, accounting or financial advice. The information in this article, and any opinions expressed therein, do not constitute a recommendation or an offer to buy or sell any security or financial instrument. Viewers should consult with their financial and/or legal professionals before making any financial decisions.

Trust services are offered through Univest Bank and Trust Co. Products and services offered are not FDIC insured, are not a deposit of or bank guaranteed, and are subject to risks, including possible loss of any principal amount invested.