When you are raising a child with disabilities, planning for the future means thinking about details other families may never consider.

Who will understand your child's routines? Who will advocate for the care they need? How will you provide financial support when you can no longer be there?

An inheritance may feel like part of the answer. But leaving money directly to your child can unintentionally affect the benefits that help support their daily life.

With thoughtful planning, you can provide for your child while helping preserve those essential resources.

At The Law Office of Susan A. Katzen, we help families make these decisions with their child's needs, dignity, and future at the center of the conversation.

Why a Direct Inheritance Can Create Problems

Some public benefits have strict financial eligibility rules.

For Supplemental Security Income, or SSI, an individual generally cannot have more than $2,000 in countable resources. Cash, bank accounts, and investments may count toward that limit. Social Security Administration

Imagine leaving your adult child $50,000 through your will. You want that money to provide security and help cover future expenses.

Unfortunately, receiving it directly could affect their SSI eligibility. An inheritance may count as income when received and as a resource afterward if retained.

The intention is loving. The consequences can still be disruptive.

That is why planning involves more than deciding how much to leave. How your child receives the money matters, too.

How a Special Needs Trust Can Help

A special needs trust, sometimes called a supplemental needs trust, provides a structure for managing money for a person with disabilities.

For parents leaving their own assets, a third-party special needs trust is often an important part of the plan.

Your child's inheritance goes into the trust, where a trustee manages it for their benefit. Your child does not have unrestricted control over the funds.

When properly drafted and administered, this arrangement can help preserve eligibility for means-tested benefits while supporting expenses that enrich your child's life.

Those expenses might include transportation, education, technology, recreation, or additional personal support.

Administration matters. Cash paid directly to the beneficiary or certain shelter payments can affect SSI, even when the trust itself is not a countable resource. Social Security Administration

Third-Party and First-Party Special Needs Trusts Are Different

The source of the money helps determine which type of trust is appropriate.

A third-party special needs trust holds assets belonging to someone other than the beneficiary, such as a parent or grandparent.

A first-party special needs trust holds assets that already belong to the person with disabilities. Those funds might come from a direct inheritance or a legal settlement.

Qualifying first-party trusts must satisfy specific requirements and generally include provisions to reimburse Medicaid from remaining assets after the beneficiary's death. Social Security Administration

A properly structured third-party trust, funded entirely with other people's assets, generally avoids that same federal payback requirement.

Planning before an inheritance is received can therefore give your family more options and prevent unnecessary complications.

ABLE Accounts Can Add Flexibility

An ABLE account offers another way to save for qualified disability expenses while receiving certain public benefits.

Beginning in 2026, the disability must have started before age 46, rather than before age 26, to meet the age-of-onset requirement. Other eligibility requirements still apply.

Qualified expenses can include housing, transportation, education, healthcare, and basic living expenses.

For SSI purposes, the first $100,000 in an ABLE account is generally excluded from countable resources. The standard annual contribution limit for 2026 is $20,000, with additional contributions possible for some working beneficiaries. Social Security Administration

These accounts can offer useful flexibility, but contribution limits make them an incomplete solution for many larger inheritances.

For your family, the best approach may involve a special needs trust and an ABLE account working together.

Beneficiary Designations Need to Match the Plan

Signing a trust is an important step. The accounts that will fund it need attention, too.

Life insurance policies, retirement accounts, and payable-on-death accounts typically transfer according to their beneficiary designations.

If your estate plan includes a special needs trust but your life insurance policy names your child directly, the proceeds may still go to your child.

That single detail can undermine an otherwise thoughtful plan.

Reviewing beneficiary designations helps ensure that each asset reaches its intended destination. Retirement accounts deserve particular attention because tax rules also affect the planning.

Grandparents and Other Relatives Should Understand the Plan

Your child may have several people who want to help provide for their future.

A grandparent might leave each grandchild the same amount, assuming that treating everyone equally will keep things simple.

For a grandchild receiving means-tested benefits, however, a direct gift can create complications.

Let relatives know that you have a plan and explain how they can coordinate their gifts with it.

A conversation today can help their generosity support your child as intended.

Leaving Everything to a Sibling Creates Risks

Some parents consider leaving additional money to another child with the understanding that it will be used for their sibling's care.

That arrangement depends on more than good intentions.

The money legally belongs to the sibling who inherits it. Divorce, creditors, illness, or an unexpected death could affect whether it remains available.

It can also leave the sibling carrying significant responsibility without clear guidance.

A trust provides a formal structure. A sibling may serve as trustee when appropriate, while the assets remain dedicated to the beneficiary.

Special Needs Planning Is About More Than Money

Your child's future includes relationships, routines, preferences, and opportunities to live a meaningful life.

A financial plan should support those things.

Consider who will coordinate care, understand your child's communication style, and recognize when something needs to change.

At The Law Office of Susan A. Katzen, we help families connect financial planning with the practical concerns that make each child's situation unique.

Plan Today for the Support Your Child May Need Tomorrow

You do not need every answer before you begin.

A coordinated trust, carefully reviewed beneficiary designations, and appropriate savings tools can help you build a stronger foundation for your child's future.

Start with your concerns, your hopes, and the people you want involved. Request a Consultation today, and together, we can turn those priorities into a thoughtful plan.