How a Special Needs Trust Protects Your Child With a Disability

As the parent of a Michigan child with a disability, you face unique estate planning considerations many of your peers may not. Your main concern may be to figure out how to set aside a legacy for your child that is not going to hinder his or her ability to access certain forms of government help.

According to Forbes, an estate planning tool many parents facing similar circumstances use is the special needs trust. How does the special needs trust work, and how does it help protect your child with a disability after your death?


The special needs trust lists your child as the beneficiary and requires you to appoint a third-party trustee to oversee its distributions. You may want to name a sister or brother of your child as the trustee. If not, you may want to appoint someone else you trust and hold in high regard.

The funds in the trust then provide for your child once you are not around to do so, covering anything from education and entertainment to utility bills.


When you enter assets into a special needs trust, they do not come into play during means-testing. Your child must undergo means-testing to use Medicaid or Supplemental Security Income. Placing assets in the special needs trust enables your child to maintain eligibility for government benefits that help cover essentials, such as housing, food or medical care.

For this reason, you may want to specify that the assets in the special needs trust are not meant to cover these specific expenses.