Protecting a disabled child financially is one of the most important considerations for parents who want to ensure their child’s stability and care, both now and in the future. As parents age, concerns about how their child will be supported—emotionally, physically, and financially—become more pressing. Without a clear plan, assets intended for a child’s well-being could be mismanaged, reduced due to government benefit limits, or lost in legal complications. Taking the right legal and financial steps provides peace of mind and ensures that resources are structured to provide lasting support.
Establishing a Special Needs Trust
A special needs trust is one of the most effective ways to provide long-term financial security for a disabled child without jeopardizing eligibility for essential government benefits such as Supplemental Security Income (SSI) and Medicaid. These programs have both income and asset limits, meaning an inheritance or direct financial gift could unintentionally disqualify a child from receiving assistance. A special needs trust helps parents set aside funds for their child’s care while maintaining access to these benefits.
A properly structured trust can cover expenses that government programs do not, such as education, transportation, personal care, and recreational activities. Naming a reliable trustee to manage the funds ensures that money is distributed appropriately and in a way that benefits the child over their lifetime. In Pennsylvania and New Jersey, both first-party and third-party special needs trusts are available, allowing families to choose the best option for their situation.
Legal Protections for Long-Term Decision-Making
Ensuring that the right people can make both the medical and financial decisions on behalf of a disabled child is important. Once a child reaches adulthood, parents no longer have automatic legal authority over their affairs, even if the child is unable to manage decisions independently. Guardianship or power of attorney documents provide the legal framework needed to continue making medical, financial, and personal care decisions when a child is unable to do so on their own.
For some families, establishing guardianship is necessary to protect a disabled adult child from financial exploitation or healthcare decisions that may not align with their best interests. Other families may prefer a less restrictive approach, such as a power of attorney, which allows the child to retain independence while still receiving assistance when needed. In Pennsylvania and New Jersey, the legal process for obtaining guardianship varies, and consulting an attorney can help determine the best course of action based on the child’s abilities and needs.
Planning for Future Care and Housing
Securing financial stability for a disabled child involves more than just structuring assets; it also requires a plan for long-term care and housing. As parents age or become unable to provide direct care, arrangements must be in place to ensure the child continues to receive the support they need. Researching assisted living options, group homes, or in-home care services helps families understand what is available and how different financial planning strategies can support these choices.
Incorporating life insurance, ABLE accounts, and structured financial planning into a long-term care strategy can further enhance security. ABLE accounts, in particular, allow disabled individuals to save money for qualified expenses without affecting their eligibility for government benefits. Ensuring that all financial tools work together strengthens a child’s financial foundation and provides confidence that they will be well cared for in the years ahead.
Rothkoff Law Group: Supporting Families in Protecting a Disabled Child Financially
Planning for a disabled child’s financial future requires thoughtful legal and financial decisions that will provide stability for years to come. Rothkoff Law Group is dedicated to helping Philadelphia and South Jersey families create comprehensive plans that protect assets, secure benefits, and ensure ongoing care. Whether establishing a special needs trust, assisting with guardianship, or structuring financial resources, our team provides the legal guidance needed to safeguard a child’s future. Let’s discuss how we can support your family’s planning needs.