Keys to Estate Planning for Beneficiaries with Special Needs

Posted on Thu, May 21, 2015 ©2021 Drucker & Scaccetti

Advice and articles on estate planning abound. But, what if one of your beneficiaries has special needs? In this case, ordinary wills, trusts and insurance may not be sufficient to handle the many complexities that entail.

Estate planning is serious enough without worrying about the well-being of a loved one who may require extra-special attention in your absence.  To that end, we’ve asked our friend, Jean Good, CFP, an expert in the area of estate planning for special needs beneficiaries, to give some guidance to help with what can be an overwhelming task.


Financial planning is absolutely essential when someone with special needs depends on you for care and support. Yet when day-to-day demands consume every waking moment, it can be hard to find the time to plan–or even know where to begin.


You may be caring for a dependent child, sibling, or spouse. Challenges range from a physical or cognitive disability to difficulty with independent living or self-care. Whatever your particular situation, having a reliable financial plan is the best way to be sure there will be funds available well into the future for your loved one’s medical care, education, and long-term support, as well as necessities for yourself and/or another caretaker.


Working with experts who understand the challenges you face can help ensure a better quality of life for your loved one with special needs and help avoid mistakes that could deprive him or her of essential government support and benefits. Focus on the following steps to help attain peace of mind for you and the best care for your loved one:


1. Think comprehensively and have goals - Planning for the entire family and all of your important goals is the best way to ensure that your loved one with special needs will be cared for today and throughout his or her lifetime. Your financial plan is the roadmap to achieving important goals for you and other family members, such as funding post-secondary education, saving for your retirement, and protecting your family if something should happen to you. Taking a comprehensive view recognizes that your loved one with special needs may still depend on you after you stop earning a regular paycheck.

2. Huddle with the experts -Tap the best advice available to help you navigate the complexities of providing for an individual with special needs. Consider building a team of advisors:  an attorney, a financial professional and a social worker can all work to optimize your planning.  Children with special needs are able to access resources through their local school district.  Look for advisors who will focus on your needs and understand your particular situation, and who have specific experience working with families like yours.

3. Understand eligibility requirements and consider a Special-Needs Trust-When structuring asset ownership as part of a financial plan, be aware of government eligibility and asset limits that affect your loved one with special needs. A special-needs trust enables you and others to provide funds for his or her support without jeopardizing eligibility for government benefits. The trust can hold money earmarked to pay for amenities that government benefits don’t provide, like entertainment, computers, travel, and other extras. A special-needs trust also can receive distributions from an annuity, life insurance death benefit, or other asset intended to support a loved one with special needs without jeopardizing that person’s eligibility for government benefits. It is important to speak to an attorney with experience in creating a special-needs trust. Also, consider writing a letter of intent with your wishes and concerns for your loved one’s future.

4. Define roles and identify a Trustee and/or Guardian-Once you have defined the goals of your trust, you need to find the right individual(s) to take care of your loved one when you aren’t able to. These should be people who are likely to outlive the person with special needs and who will follow the desires outlined in your letter of intent. A guardian oversees the person’s day-to-day care – food, housing, medical appointments, entertainment, transportation, etc. – and makes key decisions in cooperation with the trustee. A trustee is responsible for managing funds, decisions, and administrative duties for the trust. A corporate trustee can be selected to act independently or in conjunction with an individual trustee if you so choose.

5. Create a financial plan to achieve your goals -Though it can be difficult to look beyond the moment when caring for individuals with special needs, you need to plan with the intention to provide for both your loved one’s future and your own. Northwestern Mutual’s planning process helps you asses your situation and budget for day-to-day expenses, including health and personal care, educational experiences, transportation, and other costs for you and your loved one. We’ll help identify funding sources that can cover those expenses – ranging from your existing resources to Social Security disability income (SSDI) or other programs – and identify any gaps or shortfalls. Your plan should address risks such as disability and long-term care, which could jeopardize your savings, and incorporate the right amount of life insurance to take care of your loved one’s needs after you pass away.

6. Implement your financial plan -As you consistently set aside resources and fund your plan, you protect your family against risks and use investments to accumulate assets according to your goals, risk profile, and time horizon. And because circumstances change, especially for someone with special needs, be sure to periodically evaluate and update your plan to reflect your current situation and ensure it is performing to meet your goals.


You’ve spent your entire life providing for your family and giving special attention to those with special needs.  Ensuring they are taken care of for as long as they need is an essential part of your estate plan.  Working with an expert in this area makes everything easier and can lift the burden of worry.


The Tax Warriors® at Drucker & Scaccetti can work with you and your financial advisor to ensure your plan is as tax efficient at possible and that your special needs beneficiaries are taken care in the manner you wish them to be.


Jean Good, CFP, is a financial advisor with Northwestern Mutual and can be reached at

Northwestern Mutual Financial Network (NMFN) is the marketing name for the sales and distribution arm of The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM), and its subsidiaries and affiliates. Jean Good is an Insurance Agent of NM (life insurance, annuities and disability income insurance) and Northwestern Long Term Care Insurance Company, Milwaukee, WI, a subsidiary of NM (long-term care insurance). Registered Representative of Northwestern Mutual Investment Services, LLC, Savino Financial Group, 731 Alexander Rd, Princeton NJ, 08540 (609) 951-8700, a wholly-owned company of NM, broker-dealer and member FINRA and SIPC. NM and The Clinton Financial Group are not broker-dealers. There may be instances when this agent represents insurance companies in addition to NM or its affiliates.

Topics: Trusts, estate planning, Tax, beneficiaries, Special Needs

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