Legal & Financial Planning
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Legal & Financial Planning
Protecting Your Child's Future Through Thoughtful Preparation
As your child approaches adulthood, legal and financial planning becomes essential. The decisions you make now can protect their access to benefits, ensure their wishes are respected, and provide long-term security.
This page explains the key legal frameworks and financial tools families should understand. These topics can feel overwhelming, but you do not need to address everything at once. Start where it matters most for your family and build from there.
The Age of Majority: What Changes
At the age of majority in your state (often 18), your child becomes a legal adult. This is true regardless of their disability or support needs.
At the age of majority:
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Parents no longer have automatic legal authority to make decisions
Medical providers may require your adult child's consent for treatment
FERPA rights transfer to the student, meaning educational records become theirs to control
Financial institutions treat them as an independent adult
SSI eligibility is recalculated based on your child's income and assets, not the family's
For families where the individual cannot safely make all decisions independently, legal planning before the age of majority is critical.
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Key Healthcare Transition Resources
There is a spectrum of legal arrangements, from minimal intervention to full guardianship. The right choice depends on your child's abilities, needs, and preferences.
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Limited or Partial Guardianship
Limited guardianship grants authority over specific areas only, such as medical decisions or financial management, while preserving autonomy in other areas.
This approach recognizes that someone may need support in some domains but can make decisions independently in others.
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Full Guardianship (Conservatorship)
Full guardianship grants a court-appointed guardian authority over personal and/or financial decisions.
This is the most restrictive option. Depending on state law and the specific court order, it may limit significant legal rights, which can include voting, marriage, and medical decision-making. The specific rights affected vary by jurisdiction.
Full guardianship may be appropriate when an individual cannot make safe decisions in any area of life. However, courts increasingly favor less restrictive alternatives when possible.
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Limited or Partial Guardianship
Limited guardianship grants authority over specific areas only, such as medical decisions or financial management, while preserving autonomy in other areas.
This approach recognizes that someone may need support in some domains but can make decisions independently in others.
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Supported Decision-Making
Supported decision-making is a less restrictive alternative to guardianship. The individual retains their legal rights but has a trusted support network that helps them understand options and make informed decisions.
A formal supported decision-making agreement identifies supporters and the types of decisions they help with. The individual remains the decision-maker.
Supported decision-making is increasingly recognized in state laws and is often preferred by disability rights advocates.
Power of Attorney
A power of attorney (POA) is a legal document that grants another person authority to act on someone's behalf. Unlike guardianship, a POA is voluntary and requires the individual to have legal capacity to grant it.
Types of power of attorney:
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General Power of Attorney: Broad authority over financial and legal matters
Limited Power of Attorney: Authority for specific purposes or time periods
Durable Power of Attorney: Remains in effect if the person becomes incapacitated
Springing Power of Attorney: Takes effect only when specific conditions are met
For individuals who can understand and agree to a POA, this may be preferable to guardianship because it preserves more autonomy.
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Healthcare Proxy and Living Will
A healthcare proxy (also called a healthcare power of attorney) designates someone to make medical decisions if the individual cannot.
A living will documents the individual's wishes about medical treatment, especially end-of life care.
These documents can be established for adults who have the capacity to express their wishes, even if they need support in other areas.
Representative Payee
A representative payee is designated by the Social Security Administration to manage SSI or SSDI benefits on behalf of someone who cannot manage their own finances.
This is a separate process from guardianship and does not affect other legal rights.
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Choosing the Right Approach
The goal is to provide necessary protection while preserving as much autonomy as possible.
Questions to consider:
In what areas does your child need support making decisions?
In what areas can they make decisions independently?
What is the least restrictive option that still ensures safety?
Financial institutions treat them as an independent adult
What are your child's own preferences about how decisions are made?
Consulting with an attorney experienced in disability law can help you understand your options and choose the right approach for your family.
Financial Planning for Long-Term Security
Financial planning for a disabled adult is different from typical planning. The wrong approach can accidentally disqualify your child from essential benefits.
Special Needs Trusts
A special needs trust (also called a supplemental needs trust) holds assets for the benefit
of a disabled individual without affecting their eligibility for means-tested benefits like SSI Iand Medicaid. There are several types:
Third-Party Trust
Funded by family members or others with assets that never belonged to the disabled individual. Does not require a Medicaid payback provision. Remaining funds can pass to other family members.
First-Party (Self-Settled) Trust
Funded with the disabled individual's own assets, such as an inheritance or legal settlement. Must include a Medicaid payback provision, meaning remaining funds go to the state after death to reimburse Medicaid costs.
Pooled Trust
Managed by a nonprofit organization. Individual accounts are pooled for investment purposes. Can be funded by the individual or third parties. May be an option when a standalone trust is not practical.
A properly drafted special needs trust can pay for things that improve quality of life without affecting benefits: education, recreation, personal care items, technology, travel, and more.
ABLE Accounts
ABLE (Achieving a Better Life Experience) accounts are tax-advantaged savings accounts for disability-related expenses.
Key features:
Available to individuals whose disability began before age 46
The first $100,000 in an ABLE account is excluded from SSI resource limits
Contributions grow tax-free when used for qualified expenses
Can be used for education, housing, transportation, healthcare, assistive
technology, and more
Annual contribution limits apply (tied to the federal gift tax exclusion)
ABLE accounts are simpler to set up than trusts and can complement a special needs trust as part of an overall financial plan.
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What Not to Do
Well-meaning family members sometimes make mistakes that harm the individual's benefits:
Types of power of attorney:
Leaving an inheritance directly to a disabled individual (instead of to a trust) can disqualify them from SSI and Medicaid
Putting assets in the disabled individual's name without planning can have the same effect
Gifting money directly, rather than through an ABLE account or trust, can count against resource limits
Working with an attorney and financial planner who understand disability benefits is essential.
Estate Planning Considerations
Your estate plan should account for your disabled child's long-term needs.
Key features:
Ensure your will directs any inheritance to a special needs trust, not directly to your child
Review beneficiary designations on life insurance, retirement accounts, and other assets
Consider life insurance to fund the trust after your death
Update your plan when circumstances change
Communicate your plan to other family members so they do not inadvertently leave direct gifts
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Key Resources
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ABLE National Resource Center
(ablenrc.org)
Comprehensive information about ABLE accounts, including state program comparisons.
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Special Needs Alliance
(specialneedsalliance.org)
National network of attorneys specializing in disability and public benefits law.
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Center for Public Representation
Resources on supported decision-making as an alternative to guardianship.
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The Arc (thearc.org)
Offers guides on estate planning for families of individuals with disabilities.
A Note to Families
Legal and financial planning can feel complicated and emotionally difficult. You are making decisions about a future you cannot fully predict.
Start with what matters most. Ask for help. Revisit your plan as circumstances change.
Planning is not about control. It is about protection, security, and ensuring your child has what they need to live a good life.
The goal is not a perfect plan. The goal is a plan that protects your child while respecting their dignity and autonomy.
