There are many important financial planning strategies to help those with special needs. These include ABLE accounts, 401(k) plans, and Trusts. It is also important to establish an emergency savings fund. 


Planning for the financial future of a child with special needs is a complex task. There are certain benefits of special needs financial planning, but there are also a few key things to keep in mind. The first is to avoid leaving anything in the child’s name. Grandparents, for example, cannot leave a gift to a disabled child in a will, nor can they name the child as the beneficiary of a life insurance policy. It is important never to place gifts in the child’s name, and instead, to make a special needs trust or ABLE account for the child.

A special needs trust is a legal vehicle that helps people with special needs save for their future. This type of trust places controls over the funds in the hands of a trustee. The beneficiary cannot withdraw the funds independently, and the trustee disburses funds based on the beneficiary’s needs. Because the funds are not in the beneficiary’s name, they do not count against the individual’s government benefits.

ABLE Accounts

Whether you need to start saving for college or fund a special account for a disabled child, there are plenty of options to consider. One option is an ABLE account. These accounts are specifically designed for special needs children and allow their parents to save money while the disabled person continues to receive benefits. This type of account also has a few other advantages. It may be easier to administer and provide more independence to the disabled.

ABLE accounts allow disabled individuals to contribute up to $12,490 per year. They are not subject to the SSI income test and can build up to $529,000 in value. ABLE accounts can be used to pay for qualified medical expenses and can be used to pay for education and employment training.

401(k) Plans

Most people have retirement accounts. These accounts are designed to encourage saving by offering tax benefits. However, most are not set up to support families with special needs. Usually, the account owner must distribute when they pass away or name a beneficiary other than their spouse.

In the case of disabled people, these plans can be difficult to understand and manage. The ABLE to Work Act has helped to eliminate this disincentive to finding employment. In addition to allowing disabled people to save for their futures, ABLE accounts can also be useful for families with disabled children. With the help of this plan, disabled children can start to save for the future with their earnings, moving closer to financial independence.

Financial Planning

Emergency Savings Fund

If you have a loved one with special needs, you will want to take some time to start planning for their future. One way to do this is to open an emergency savings account covering at least three to six months of expenses. Building this type of fund doesn’t happen overnight, so you’ll need to save a little each month. However, this money can help you during job layoffs or household emergencies.

It is also helpful to talk with a financial advisor who has experience working with people with disabilities. Usually, an advisor will tell their clients to start saving for today and work toward a future they can live with. This may seem like a daunting task, but it is very important to keep in mind that the needs of a special needs family can change over time. To plan, you’ll need to set short-term goals and long-term goals.

Estate Planning

It is important to plan for a loved one with special needs. Leaving assets to them directly can prevent them from receiving valuable government benefits and other assistance. Moreover, they may need help managing their finances or caring for themselves. In these circumstances, leaving some assets in a trust is a good idea. Trusts give the estate planner more flexibility and control over how to distribute the assets to their beneficiaries.

If possible, meet with a special needs attorney before creating an estate plan. They will be able to help you set up financial strategies to ensure your child with special needs has a decent quality of life after you pass away. A special needs attorney will also be familiar with government assistance programs such as Social Security, Medicare, and Supplemental Security Income.


The costs of providing care for a loved one with special needs can be tremendous. For instance, a daycare center for severely impaired individuals can cost $100,000 per year, and a group home in the Northeast can cost as much as $140,000 or $300,000. These costs can be even higher depending on the level of care needed. Fortunately, there are alternatives to relying on government aid. For example, a special needs trust can protect a loved one from losing access to government financial aid and benefits.

Special needs financial planning involves setting up a strategy to provide care long-term. It can include doctors, therapy, and support systems. The costs of these services can be high, and often insurance policies don’t provide enough coverage to meet the needs of a person with special needs.