How to Financially Prepare for Raising a Child with Special Needs

Make the right decisions in planning for your child’s future.


Moreover, experts recommend that parents decide in their will who would assume legal guardianship if they were to die.

Develop a special-needs trust. To ensure the child is eligible to receive SSI, which is contingent on the child not having more than $2,000 in assets, parents should set up a special-needs trust. A financial adviser can help establish the trust, as well as advise the family on how much money should be allocated to the trust and develop a plan for how they're going to fund that money. Money funneled through the trust doesn't count against the $2,000 limit.

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Kline advises clients to work with a lawyer to include the trust in the parents' will, so that money left to the child upon their death doesn't count as part of the child's assets. Grandparents may also want to look over their wills, since gifts willed directly to a grandchild with special needs could affect their eligibility for government benefits.

Crafting a special-needs trust can be rather complicated, says David MacLaren, the father of four adopted children, two of which have autism and one who is legally blind. MacLaren, a scientific manager in Fortville, Ind., says he and his wife, Ann, were glad they met with an attorney who specialized in special-needs trusts. "Our lawyer came up with a customized plan for the special-needs trust, which I don't think we would have been able to do on our own," he says.

Additionally, parents should craft their life insurance policies so that funds paid out to the child upon their death are funneled through the special-needs trust, rather than being left directly to the child.