Navigating the Financial Journey: Planning for Children With Special Needs

Navigating the Financial Journey: Planning for Children With Special Needs

July 19, 2023

If you are a parent of a child with special needs, your challenges are quite different from those of other parents. These challenges may include higher medical expenses, specialized care requirements, and the need for additional support— especially after you pass away. One way of alleviating these concerns is by making sure the financial needs are adequately funded and managed. But how can parents effectively plan for these challenges and reach a stable financial future for their child?

This article offers some practical steps parents can take to address these challenges. Implementing these strategies can offer peace and comfort knowing your child will be okay even when something happens to you. 

Look into Government Assistance

Do you qualify for government assistance? While qualifications can vary by state, here are two programs worth investigating. 

Supplemental Security Income

Supplemental Security Income (SSI) is a federal income supplement program that provides cash to meet basic needs for food, clothing, and shelter. If your child meets the Social Security Administration’s definition of a disability, then they may qualify for assistance. While your child is under age 18, Social Security considers all household income when determining eligibility. Once your child turns 18, benefits are calculated on his or her income alone


Medicaid is the most important source of funding for health services for children with special needs. The Medicaid program is federally funded, but it’s administered and operated by the State (which means eligibility will vary from state to state). In most cases, if your child qualifies for SSI, they’ll qualify for Medicaid, too. The program offers:

  • A basic health insurance plan for most of its beneficiaries
  • Payment toward long-term care for individuals with disabilities
  • Funding for programs for individuals with developmental and physical disabilities

For more information on your state’s programs, contact your local health department, your state or county social services office, or your local Social Security office.

Save for the Future

529 Able

Even with government assistance, you may still have ever-growing out-of-pocket costs as you care for your child. A 529 ABLE account can help fill this gap. 

529 ABLE plans, which are similar to 529 college savings plans, are tax-advantaged savings and investment accounts which can be used for qualified disability-related expenses in addition to education-related expenses. These expenses may include housing, transportation, employment training, healthcare, and anything else needed to maintain or improve your child’s quality of life or health. 

Anyone, including the account owner, family, and even friends, can contribute to an ABLE account. However, as of 2023, annual after-tax contributions are limited to $17,000 per year into an ABLE account. The money can remain in the account growing tax-deferred as long as needed and is then withdrawn tax-free for qualifying expenses. And if the account balance is below $100,000, it doesn’t count toward calculating SSI eligibility. 

Opening an ABLE account is often the first step in securing a special needs child’s future because of the ease of start-up, small initial deposits required, and especially the ability to open one without the need of an attorney.

Special Needs Trust

A common second step, or alternative, to ABLE plans is establishing a special needs trust. Once drawn up properly by an experienced attorney, many different types of assets can be placed in the trust to fund the special needs child. If all assets list the trust as the beneficiary, and not the special needs child, assets placed in this type of trust don’t interfere with your child’s ability to receive government assistance. If your child is named the beneficiary of assets totaling more than $2,000, they’ll no longer qualify for government assistance. Keep this in mind to share with well-intentioned family members or friends who would like to leave assets to your child. They’ll need to list the trust as the beneficiary for your child to remain eligible for benefits. 

It’s important to note that ABLE plans, while useful in certain circumstances, are not a replacement for special needs trusts, which are broader and have fewer restrictions. As stated above, we strongly recommend having them drawn up by an experienced attorney in the field (not by an attorney who is a generalist).

Hope for the Best (but Prepare for the Worst)

We can’t emphasize enough the importance of planning ahead to prevent disruptions or the loss of benefits during big change events. Such life events may include inheriting assets, a caregiver passing away, your child becoming an adult by legal standards, and policy and benefit legislative changes. 

Proactively preparing can prevent upheaval and stress that these life events can create. In addition to the funding vehicles suggested above, two steps we recommend taking:

A Letter of Intent

You know your child better than anyone. If anything were to happen to you, you’d want your friends and family to be aware of all those personal details. While this document isn’t legally binding, a letter of intent can include incredibly helpful information, such as: 

  • Your child’s daily, weekly, and monthly routine
  • Your child’s personal likes and dislikes
  • Your hopes and dreams for your child
  • Your child’s medical history 
  • Contact information for doctors
  • Any other pertinent information

Adult Guardianship

Once your child is 18, they’re legally an adult in the eyes of the law. If you foresee your child needing guardianship beyond the age of 18 (because they’re unable to make their own medical and financial decisions), speak with a professional attorney about how you can become their legal guardian. This process may include creating a power of attorney or healthcare proxy that helps govern decision making in the event of an emergency. 

It Takes a Village

As a parent of a child with special needs, the unique challenges you face may leave you feeling isolated. While your family and friends may provide support, the truth is that it takes a team to carry the full scope of needs you and your child have. Thankfully, there are many public and private programs dedicated to helping families like yours. Many of these programs are community-based, often found within schools, and operated by family service agencies. You can also utilize state programs, government entitlement programs, and national organizations as valuable resources for support and assistance.

Having support and empathy along the way is also critical to your well-being, especially when it comes to your finances. At Wilkinson Wealth Management, our team can assist you in navigating the complex financial issues by providing resources that fit your specific situation. With my personal knowledge and compassionate guidance, I am here to help. 

To learn more, reach out to us at 434-202-2521 or use our Contact Us page to schedule an appointment. Together, we can determine if we’re the right fit to help you pursue financial stability in this unique area of need.

About Bryan

Bryan Strickland is a financial advisor and CERTIFIED FINANCIAL PLANNER™ professional at Wilkinson Wealth Management, a financial services firm in Charlottesville, Virginia, providing customized financial planning and Investment strategies with a personal approach. Bryan uses his over 15 years of experience to help his clients navigate the complexities of their financial situation so they can look to the future with clarity and confidence. He strives to get to know his clients—what matters to them, their concerns, dreams, and goals—so that he can design a tailored plan to get them from point A to point B and walk with them through whatever life throws their way.

Bryan started his career as a project engineer and project manager after earning a degree in civil engineering from the University of Virginia. He made a career change to pursue his true passion of serving others through personal financial planning that puts the client first. Outside of work, Bryan loves spending time with his wife, Nicole, and their three children, Tyler, Izzy, and Brendan. You can also find him on the field as a volunteer coach for a local travel soccer team. He enjoys singing tenor with the Virginia consort and his church’s choir and participating in most sports, including soccer, triathlon, and obstacle course racing. To learn more about Bryan, connect with him on LinkedIn.