Co-Written by Tabitha Justice & Franki Parsons, Esq.
Tabitha Justice is the CEO of Just Us Retirement Solutions, specializing in Medicare education, long-term care planning, and empowering families to take control of their retirement journey.
Franki Parsons is an attorney with Ray, Winton & Kelley, PLLC, where she focuses exclusively on estate planning, elder law, and special needs trusts. With over a decade of experience and a personal passion for helping families navigate complex planning needs, Franki is recognized as one of West Virginia’s leading voices in special needs legal strategy.
A Special Needs Trust is one of the most powerful yet misunderstood tools in estate planning. For families who have a loved one with a disability, it can mean the difference between maintaining access to critical support programs and losing everything those programs provide. What many people don’t realize is that leaving money to someone receiving needs-based benefits—such as Supplemental Security Income (SSI) or Medicaid—can have devastating consequences if not handled properly. These programs impose strict financial limits, often capping personal assets at just $2,000. Any inheritance or gift beyond that amount can lead to immediate disqualification.
The intention behind a financial gift is almost always generous. A grandparent may leave money in their will for a disabled grandchild. A parent may set aside funds to make sure their child is supported long after they’re gone. But if that money is left directly in the name of the beneficiary, it becomes a countable resource, and access to income, medical care, and even housing can be abruptly cut off. Families are then forced into crisis mode—trying to spend down the assets quickly, reapply for benefits, and hope their loved one doesn’t lose necessary care in the meantime.
A Special Needs Trust is designed to prevent this outcome. It allows someone to receive financial support without having that support interfere with their eligibility for government programs. The trust legally owns and manages the assets, while a trustee makes decisions on how and when funds are used. These trusts are meant to supplement benefits, not replace them. They can cover needs that fall outside of basic living expenses—things like transportation, therapy, educational programs, recreation, or assistive devices that improve quality of life. However, they must be carefully managed and drafted in strict compliance with federal and state law. An improperly written trust, or one administered by someone unfamiliar with benefit rules, can trigger the very penalties the trust was designed to avoid.
It’s also important to understand that Special Needs Trusts are not only for individuals who are currently disabled. Disabilities can arise from accidents, illness, or age-related decline. Modern estate plans can include flexible provisions—sometimes referred to as “toggle language”—that allow a trust to convert into a Special Needs Trust if the beneficiary is receiving benefits at the time of inheritance. This forward-thinking strategy ensures protection, even if the need arises later in life.
Unfortunately, not all estate planning attorneys are experienced in this area. A well-meaning but inexperienced professional may use the wrong language, include unnecessary Medicaid payback provisions, or fail to follow state-specific requirements. These mistakes can cost families both money and access to care. That’s why it’s essential to work with someone who regularly handles special needs planning and fully understands the impact of each clause and condition.
At its core, a Special Needs Trust is about protecting dignity and preserving peace of mind. It allows families to provide for the people they love without forcing them to choose between financial help and the public services they depend on. With proper planning and the right guidance, it is possible to create a plan that honors both intention and protection.
The Just Us Final Take
Planning for the future of a loved one with a disability can feel overwhelming—but the right support and information can make all the difference. Whether you’re just starting the process or you’ve run into a complex situation involving benefits, trusts, or long-term care, you don’t have to figure it out on your own.
When it comes to legal guidance—especially around estate planning, Medicaid eligibility, or special needs trusts—we strongly recommend working with someone who specializes in this highly nuanced area of law.
For legal questions, contact Franki Parsons, Esq. at Ray, Winton & Kelley, PLLC.
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