Skip to content

One of the most common mistakes that we as planners see when it comes to families dealing with a special needs member is the temptation to disinherit them, especially in children. The question quickly arises for those that may not have a child with Special Needs, how could anyone think this is reasonable?! The answer is complex but can be distilled to the complexity of government benefits and how a person’s assets impact the recipient.

In the case of a child with Special Needs, it is often tempting to disinherit them to avoid any impact on the different types of government assistance they receive or might receive in the future. No parents make this choice out of a desire to provide anything but the best for their children. However, is this truly the best choice? If a parent chooses to disinherit a child, where does that money go? Especially in the case of the child with Special Needs, many of the necessary supports are expensive and are not covered by government aid; who will help? Often the most popular answer is, “We are going to leave the inheritance to a sibling; they will use the money to take care of (child with Special Needs).”

At this juncture, many questions come to mind:

  • Is that sibling ok with that decision?
  • Is that sibling even aware of this plan?
  • What are the expectations that the sibling must meet?
  • How much of the inheritance should be committed exclusively to the child with Special Needs?
  • How is that quantified?
  • What if the sibling pre-deceases the child with Special Needs?
  • Who is next in line?
  • And where does that money go?

As is apparent, this strategy of disinheritance, although born of good intentions, creates vastly more problems than it solves and can even generate animosity if families aren’t careful. There is a menu of choices that families can choose from that allow children and others with Special Needs to inherit assets without impacting those individuals’ benefits.

Every individual and situation is unique, and each requires a different solution and level of support for an optimal outcome. Do you need help planning for your unique situation? Bridgeworth planning coordinator Scooter Thomas holds his Chartered Special Needs Consultant® (ChSNC®). He serves our clients by applying his unique background to help families work through the complexities of financial planning with special needs family members.

Bridgeworth is now a part of Savant Wealth Management as of 11/30/2023. Savant Wealth Management (“Savant”) is an SEC registered investment adviser headquartered in Rockford, Illinois.