A Financial Planning Guide for Families with Disabilities

Linda Migliazzo |

About 61 million adults in the U.S. live with a disability. Many of these disabilities are serious enough to impact a person’s daily life.1

There may be financial benefits available to those whose disabilities leave them unable to hold down a job. However, these benefits may come with strict rules and regulations, such as limits on the assets a disabled person may own. Because of this, financial planning looks different for families with disabilities. Here are some options to consider.

Special Needs Trusts

For those who lack the mental capacity to do their financial planning, or those who receive Supplemental Security Income (SSI), Medicaid, or another need-based benefit, a special needs trust can be a way to maintain a nest egg without losing access to those benefits. A special needs trust places control of the trust funds with the trustee. The beneficiary cannot withdraw funds on their own. Instead, the trustee disburses funds based on an assessment of need.

Because these funds are not in the beneficiary’s name and the beneficiary does not control them, they usually do not count as assets for SSI, Medicaid, SNAP (food stamps), subsidized housing, or other government-funded benefits.

ABLE Accounts

An alternative to a special needs trust is an “Achieving a Better Life Experience” (ABLE) account, a tax-advantaged account similar to a 401(k).2

Under an ABLE account, you can set aside up to $15,000 per year to pay for disability-related expenses. This money grows tax-free, and withdrawals may also be tax-free if used for qualified disability expenses.

Wills and Trusts

Everyone needs to have a legal will that specifies how to handle their assets after death. But if a child or another beneficiary of your estate has a disability, having a will becomes even more important. If you do not have a will, your assets might pass directly to your child or beneficiary, possibly inadvertently rendering them ineligible for certain benefits. If your will does not name a guardian for your child, the decision of who will care for your child may be up to a judge.

Planning for Independence

If your child or another disabled loved one finds it too difficult to live independently, it is worth thinking about their future. For many, group homes are a better option than larger care facilities. Unfortunately, the waiting lists may be long. You may need to work with your local developmental disabilities agency to see when you might register for group home placement, what group homes may be available, and what else you might need to consider. In this situation, a special needs trust or ABLE account may come in handy, as it may be easier to qualify for certain group homes if you can show that your child or loved one has access to enough assets to support themselves.

If you are ready to take the next step or learn more, a financial professional who specializes in disability planning may help you explore your options.


Disability Impacts All of Us, Center for Disease Control and Prevention

About ABLE Accounts, ABLE National Resource Center,


Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

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