The Importance of Financial Planning For Families Affected by Disability

Intellectual and physical disabilities affect approximately 10% of the population. A parent’s journey with their disabled child is akin to a never-ending winter storm: spectacularly beautiful and simultaneously stressful. Families affected by disability navigate an endless blizzard of Individualized Educational Plan Meetings (IEPs), therapists, medical specialists, and psychologists. While steering their young charges through disability’s pervasive winter, it can be difficult for parents to even think about, must less plan for, the inevitable spring thaw: the moment that child reaches adulthood and/or ages out of the public-school system. Yet future financial planning is essential to protect families affected by disability.

Even a New England winter eventually gives way, and so does childhood.  It is important to plant the financial seeds for a disabled child’s future as soon as the storm hits. Parents must begin to consider the long-term financial needs of their progeny as soon as it becomes apparent they may not be able to support themselves as adults. This includes financial, medical, long-term care, estate, and yes, tax planning.

On turning 18 in most states, disabled children are eligible to collect social security disability income and may qualify for Medicaid. Certain factors, such as college savings accounts, fiduciary savings accounts, even savings bonds, and, if the parents are divorced, child support payments can affect a child’s eligibility for benefits. Even being named as an indirect beneficiary in a will could jeopardize a disabled child’s financial future. Federal law sets maximums on the amount of money a disabled person may have in their name and still collect benefits.

Careful planning on the part of parents is necessary to ensure the long-term financial needs of disabled children are met without said children being subject to taxable events. Prior to a child turning 18, parents should partner with a special needs attorney to establish guardianship of said child with the court and to establish a trust to capture long-term investment monies currently in the child’s name as well as income used to support the child. Trusts can create taxable events. Thus, it is important to engage tax professionals in special needs planning. Planting financial support seeds during disability’s initial blizzard will ensure healthy growth come spring.

To learn more about how our firm can help you plant the seeds for your child’s future, call our office for a consultation.

Cristina M. Miller, Writer, Advocate, and Autism Mom, provides offers links to additional information, including legal information, and a parent’s perspective on disability in her article:  An “Alleged Incapacitated Person” aka OK, Our Child Has A Disability. Now What Do We Do? published on


1 Kraus, L., Lauer, E., Coleman, R., and Houtenville, A. (2018). 2017 Disability Statistics Annual Report. Durham, NH: University of New Hampshire.