Parenting is always an act of love, responsibility, and deep planning for the future. Every parent worries about how to give their child the best life possible — but when your child has special needs, that responsibility takes on even more weight. You’re not just thinking about school, college, or career. You’re thinking about lifelong care, stability, and support — especially when you’re no longer here to provide it yourself.

That’s where a Special Needs Trust comes in.

If you're wondering how to protect your child’s future without jeopardizing their access to essential government benefits like Medicaid or SSI, this guide is for you. In today’s blog, we’ll walk through what a Special Needs Trust is, how it works, and why it could be one of the most important steps you take to secure your child’s long-term well-being.

Who Needs a Special Needs Trust?

If you’re a parent or caregiver of a child with special needs, you’ve likely asked yourself hard questions about the future.

• What will happen to them if I’m not around?

• Will they be able to work or support themselves?

• What if their condition changes?

• How can I make sure they’re cared for without leaving them vulnerable?

So who needs a Special Needs Trust? A Special Needs Trust is especially important in the following situations:

A Child with a Diagnosis

If your child has a medical condition or diagnosis — such as Down Syndrome, autism, or a chronic mental or physical illness — you may worry how they will be cared for in adulthood. A trust gives you a way to prepare, even if their future abilities are still uncertain.

An Adult Child Who Becomes Disabled

Sometimes a life-changing event (like a car accident or serious illness) can leave an adult child permanently disabled. In these cases, parents often choose to leave future inheritances through a Special Needs Trust to ensure long-term support.

A Child with Ambiguous or Changing Needs

Not every diagnosis comes with clear answers. Maybe your child is doing well now, but there’s a chance they won’t be able to hold a full-time job down the road. A properly drafted estate plan can give your family flexibility, allowing a trust to be created only if needed when the time comes.

How the Trust Improves Quality of Life

Having a Special Needs Trust in place for your qualifying child will improve their quality of life. And here's where the heart of this planning really shines.

The funds in a Special Needs Trust can’t be used for basic food or shelter (those are meant to be covered by public benefits), but they can be used for:

• Medical and dental expenses not covered by insurance

• Personal care attendants

• Special education or tutoring

• Transportation, including a vehicle

• Travel and vacations

• Hobbies and entertainment

• Electronics, furniture, or other items to support comfort and connection

These are the kinds of things that help your loved one live with dignity, connection, and joy — not just survival.

Who Manages the Trust?

Now that you have created a trust, it’s very important that you choose the right trustee. A trustee is responsible for managing the assets in the trust and making distributions according to the rules. This can be:

• A trusted family member or friend

• A professional trustee (such as a bank or financial institution)

• A nonprofit pooled trust organization

You’ll want someone who not only understands the legal responsibilities, but who also understands your loved one — their needs, personality, and dreams.

Planning Ahead: When to Create a Special Needs Trust

Sometimes parents don’t feel ready to set up a full trust while they’re still alive. Maybe your child’s needs aren’t clear yet, or maybe you’re not sure how much you’ll be able to leave behind. The good news? You can build flexibility into your estate plan.

By working with an experienced estate planning attorney, you can create a will or living trust that gives your executor the power to establish a Special Needs Trust after your death — only if it’s needed. This is often called a “trigger trust” or “standby trust.”

It’s one more way to make sure your child’s future is protected, even if you’re not sure what that future will look like yet.

What Happens to the Trust When My Loved One Passes Away?

This is a tough, emotional question — but one that every parent thinks about. If your child passes away and there’s money left in the trust, what happens next depends on the type of trust:

• In a first-party trust (funded with the beneficiary’s own assets), Medicaid may require repayment from the remaining funds.

• In a third-party trust (funded by someone else), you can name a contingent beneficiary — like another child, a charity, or other loved ones — so the money goes where you want it to.

Planning ahead gives you control over this decision and guarantees that your family’s legacy is handled with care.

Talk With Your Estate Planning Attorney About Special Needs Trusts

We know this kind of planning is emotional. It’s not easy to think about a future where you’re not here to protect your child. But building the right legal foundation now is one of the most powerful acts of love you can give. 

At Schroeder Larsen Law, we help families just like yours create personalized, compassionate estate plans that protect your loved ones and honor your wishes. Whether you’re just beginning to explore your options or ready to move forward with a Special Needs Trust, we’ll walk with you — every step of the way.

You’ve done the hard work of advocating for your loved one their whole life. Let’s make sure that doesn’t stop, even when you’re no longer here.

We’re here when you’re ready. Click the button below to schedule a consultation today and start building a future. One that gives your loved one security, dignity, and the best quality of life possible.

Click Here to Start Protecting Your Future

P.S. What’s the Difference Between a Special Needs Trust and a Supplemental Needs Trust?

These terms are often used as if they mean the same thing, but there are key differences! It’s easy to get confused, but here’s a simple way to think about it:

• A Special Needs Trust can be funded by many sources, even by the person with a disability themselves, such as through a settlement or inheritance.
  
  
  

• A Supplemental Needs Trust, on the other hand, is created and funded by someone else — a parent, grandparent, or guardian — who simply wants to make sure their loved one is cared for long after they’re gone. The person with the disability doesn’t contribute their own money.