Parents of special needs children must be cognizant of special considerations in virtually every area of life. Estate planning is no exception. The stringent eligibility requirements of SSDI/SSI and Medicaid/Medicare make the child’s continued eligibility a paramount concern when determining the child’s inheritance. Even if the child is currently employed and not eligible for disability benefits due to the child’s income, parents must evaluate how long the child will be able to continue making enough income to cover disability-related expenses and the impact that inheritance will have on the child’s eligibility for future disability benefits.

To be eligible for SSDI/SSI a disabled individual who is unmarried can only have a mere $2,000 in resources. The resources cap for Medicaid eligibility is $4,000 for an unmarried individual. (For more information on eligibility requirements and the definition of a “resource” under the regulations, visit and These resource caps do not allow for a substantial inheritance by any means. However, parents of children with disabilities can preserve the child’s eligibility for disability benefits by leaving inheritance for the child in a resource-exempt trust or account. Parents should consult an attorney to determine whether to establish any of the following trusts or accounts for their child.

Third Party Special Needs Trusts are irrevocable trusts that can be established by parents, grandparents, legal guardians, or courts, but not disabled individuals who are beneficiaries of the trust. A trust may be funded with the beneficiary’s assets, but the beneficiary cannot act as trustee or control the trust. The beneficiary must be under age 65. At the beneficiary’s death, the remaining assets in the trust are paid to the government to repay any government benefits received by the beneficiary.

Pooled Trusts are irrevocable trusts that are established and maintained by a non-profit charity. A disabled person, parent, grandparent, guardian, or court may establish a subaccount for the beneficiary that is grouped with subaccounts of other beneficiaries into a single pooled trust. The beneficiary may be over age 65.

“529A” Accounts (known as ENABLE Accounts in Nebraska) allow disabled individuals of any age who are medically eligible for SSI or SSDI and became disabled prior to age 26 to contribute up to $14,000 of exempt assets per year to the account (with a maximum exemption cap of $100,000).

While these trusts and accounts may seem to offer disabled children the best of both worlds by allowing them to continue to receive disability benefits even after receiving an inheritance, the reality of these options is not as rosy as one might hope. Each of these trusts and accounts impose spending restrictions for the assets and limit the ability of the child to control the child’s own inheritance, which may be particularly disheartening to parents of children with strictly physical disabilities. Thus, parents must evaluate the totality of their circumstances with sound legal input to develop a customized estate plan that meets the unique needs of their family.