When I meet with families about special needs trusts, the question that stops them is rarely about the documents. It is about the person. Who will manage this trust when we are gone? Some families have an obvious answer: a sibling, an aunt, a trusted friend. Many do not. And when families start looking at banks and trust companies, they find high fees and minimum balances that put a corporate trustee out of reach for an ordinary trust.
There is a middle path that most families have never heard of: the independent trustee.
What an independent trustee is
An independent trustee is an individual professional who administers trusts as their occupation. They are not employees of a bank or a trust company. They run their own small practices, which keeps overhead low, and they usually charge either an hourly rate or a yearly fee of around one percent of the trust. Corporate trustees often charge more than that and may decline trusts below a minimum balance entirely.
The lower fee is not the only advantage. An independent trustee has a small client list, so the person who knows your son or daughter is the same person who answers the phone. For a special needs trust, where the trustee’s decisions touch SSI, Medicaid, housing, and daily quality of life, that continuity matters as much as the cost.
Where to find one: a national directory
Until recently, finding an independent trustee meant asking around and hoping. Now there is a national resource. The Independent Trustee Alliance directory lets you search by state and filter for trustees who handle special needs trusts. ITA certified trustees must have years of trustee experience, ongoing continuing education, professional references, and agree to a code of ethics. A listing is not a guarantee, but it is a real starting point that did not exist for earlier generations of families.
A second place to look is the National Guardianship Association’s Find a Guardian directory, which lists individual professional fiduciaries across the country, many of whom also serve as trustees.
We have added a permanent page to our site with both listings and the questions to ask before you hire anyone: Find an Independent Trustee. You will find it in our Resources menu from now on.
How to interview a trustee candidate
Treat this like hiring for the most important job in your child’s future, because it is. Ask what they charge and when. Ask how many special needs trusts they administer and how they stay current on SSI and Medicaid rules. Ask about their succession plan: what happens to your trust if something happens to them? Ask whether they carry errors and omissions insurance. And ask whether a family member can serve alongside them as co-trustee or trust advisor, which lets your family keep a voice while the professional handles the rules.
One note of caution that applies to any directory: a listing is a starting point, not an endorsement, and that includes the directories we link to. Interview more than one candidate, check references, and make sure the fee arrangement is in writing.
You do not have to decide alone
Our mission is to give families free legal educational information so you can make informed decisions, whether you use our low-cost documents, hire your own lawyer, or both. If you want to talk through your trustee decision, the consultation is free. Education is always free. Email tom@specialneedstrustsonline.com or call 508-690-0012.
Ask a room full of parents what stops them from setting up a special needs trust, and eventually someone will say it out loud:
“I’ve heard the state takes it all back when he dies. So what’s the point?”
It is the most common reason families walk away from a trust, and for most of them it is simply not true.
The confusion comes from the fact that there are two different kinds of special needs trust, both are called “special needs trusts,” and only one of them has a Medicaid payback. Which one you are dealing with comes down to a single question.
Whose money is it?
That is the whole test. It does not matter who set the trust up or whose name is on it. What matters is whose money went in.
Third-party trust
First-party trust
Funded with someone else’s money: parents, grandparents, an aunt, a life insurance policy.
Funded with the beneficiary’s own money: a lawsuit settlement, back benefits, an inheritance that landed in their name.
No Medicaid payback. Whatever is left goes wherever you said it should go: siblings, grandchildren, a charity.
Medicaid payback required by federal law. At death, the state is reimbursed first. Anything left over then passes to your heirs.
Can be created at any time, at any age.
Must be established before the beneficiary turns 65.
So here is the answer to the question that stops so many families:
If you are a parent or grandparent planning to leave money to a loved one with a disability, you are creating a third-party trust. There is no Medicaid payback at any point. The money you leave stays in your family.
The payback rule that everyone has heard about is real, but it attaches to the first-party trust, and only because Congress required it in exchange for letting someone shelter their own money and stay on benefits. It is the price of a very good deal, not a punishment. A fuller side-by-side comparison is here →
The mistake that turns one into the other
Now the part that actually costs families money.
A third-party trust only stays a third-party trust if the money goes straight into it and never touches your child’s hands. The moment an inheritance lands in your adult child’s name, even for a day, even by accident, it becomes their money. Their money can only be sheltered in a first-party trust, with the payback.
Here is how that happens in real life, over and over:
A grandparent writes a will leaving “$25,000 to each of my grandchildren,” with the best intentions in the world.
A parent names their adult child as a beneficiary on a life insurance policy or a retirement account, because that is what the form asks for.
A relative dies without a will, and state law hands your child a share automatically.
A well-meaning aunt opens a savings account for your child and puts their name on it.
Any one of these can do two things at once. It can push your child over the $2,000 resource limit and knock them off SSI and Medicaid, and it can convert money that could have passed cleanly to the family into money the state gets reimbursed from.
The fix is simple. Nobody leaves money to your child. Everybody leaves money to the trust, and the trust takes care of your child. The same money serves the same purpose with a completely different outcome.
Three things to do this month
Set up the third-party trust first. It has to exist before anyone can name it. Until it does, every relative’s will is pointed at a target that is not there.
Check your beneficiary designations. Life insurance, 401(k), IRA, pension, savings bonds. These pass outside your will. A perfect will cannot save a retirement account that names your child directly. This is the most commonly missed step in special needs planning, and it takes twenty minutes to fix.
Tell the grandparents. Have the conversation, awkward as it is. Give them the exact language: leave the gift to the trust, not to the child. Most families find that relatives are relieved to be told. They were worried about doing the wrong thing and had no idea what the right thing was.
Watch: Special Needs Trusts & Wills Explained
Attorney Tom Sannicandro walks through how the trust and the will work together, why beneficiary designations matter more than most families realize, and what belongs in each document.
What if the money is already in your child’s name?
It happens, and it is not fatal. A first-party special needs trust can still shelter it and protect their benefits. The payback applies, but the alternative is spending the money down to $2,000 and losing years of Medicaid coverage in the meantime. Sheltering it is almost always the better outcome. First-party trusts for adults with disabilities →
An ABLE account can also hold a modest amount of the beneficiary’s own money. Note that ABLE accounts do carry a Medicaid payback, which is another reason the large, long-term money belongs in a third-party trust and the everyday spending money belongs in ABLE.
What it costs
Attorneys typically charge $3,000 to $5,000 for a special needs trust and a coordinated will. We are a 501(c)(3) nonprofit founded by a disability law attorney who is also the father of an adult son with Down syndrome, and a complete personalized trust and will is $189.99. You answer guided questions in plain English and the documents are emailed to you when you finish.
The Letter of Intent and the HIPAA Release are free to anyone, with no purchase.
This article is general information about how these trusts work, not legal advice about your family’s situation. State Medicaid rules and trust requirements vary. If your situation involves a settlement, an inheritance already received, or a trust that has already been funded, talk with us or with an attorney in your state before you act.
The day your child turns 18, you lose the legal right to talk to their doctor, see their school records, and manage their money. Nobody warns you ahead of time.
There is no letter in the mail and no meeting at the school. One morning your son or daughter turns 18, and the pediatrician’s office that has known your family for eighteen years can no longer legally tell you the results of a blood test. The school that has sat across the table from you at every IEP meeting since kindergarten now answers to your child instead of you. The bank will not talk to you. The insurance company will not talk to you.
This surprises almost every family. It should not have to.
The good news is that every one of these doors can be held open. It just has to be done before the birthday, by signing a handful of documents while everyone has time to do it calmly. Below is exactly what changes at 18, what you can do about it, and the order to do it in.
What actually changes the day your child turns 18
Four things happen at once, automatically, with no paperwork and no warning:
Medical privacy locks you out. Under HIPAA, your adult child’s health information belongs to them. Doctors, therapists, hospitals, and pharmacies can refuse to speak with you, and in an emergency many will.
School records transfer to your child. Under FERPA, the right to see records and consent to services moves from you to the student at 18. If your child is still in high school or in a transition program that runs to age 22, you can be shut out of the IEP process you built.
Financial and legal authority ends. You can no longer sign for them, open accounts for them, apply for benefits on their behalf, or make decisions about their money.
SSI gets re-decided under adult rules. Social Security performs an age-18 redetermination, re-evaluating disability based on ability to work rather than childhood functioning.
There is another side to that last change, and most families have never heard it:
Your income stops counting at 18. While your child is a minor, Social Security counts a parent’s income and resources against the child. That is why so many families are told their child does not qualify for SSI. The counting stops at 18. A child who was denied SSI because you earned too much may now qualify on their own. If you were turned down before, apply again after the birthday.
Qualifying for SSI also usually opens the door to Medicaid, and Medicaid is often the single largest source of lifetime support your child will ever have. The application is worth the effort.
The fork in the road: guardianship or something lighter?
When families learn what happens at 18, the first word they usually hear is guardianship. It is the traditional answer, and for some families it is the right one. It is not the only one, and it is not the default.
Guardianship is a court proceeding. A judge declares your adult child legally incapacitated and transfers their decision-making rights to you. It costs money, takes months, usually requires a current medical or psychological evaluation, and is difficult to undo. It also removes rights, including in many states the right to vote, to marry, and to sign a contract.
For some people, that level of protection is necessary and appropriate. For many others, it is more than the situation calls for. Courts across the country now ask a harder question first: what is the least restrictive arrangement that actually keeps this person safe?
The lighter alternatives:
Supported Decision-Making: your child keeps their legal rights and formally names people they trust to help them understand choices and consequences. It is the fastest-growing alternative in the country.
Power of Attorney: your child voluntarily gives you authority over financial and legal matters. It requires that they understand what they are signing, which is a lower bar than most people assume.
Representative Payee: lets you manage their SSI or SSDI payments without any court involvement at all.
The important thing is this: the alternatives are only available while your child can still sign. Once you go to court, that option is largely gone. It is worth doing the lighter documents first and reserving guardianship for the situations that truly require it.
The 7 documents to have before the birthday
1. HIPAA Release (free)
The most valuable piece of paper for the least effort. One page, signed by your child, and doctors can talk to you again. If you do nothing else on this list, do this one. Get the free HIPAA release →
2. Health Care Proxy / Advance Directive
The HIPAA release lets you hear what is happening. The health care proxy lets you decide. If your child cannot make or communicate a medical decision, this document names you. Requirements vary by state, so use a form built for yours. State-specific healthcare directives →
3. Power of Attorney
Covers money, benefits applications, contracts, housing, and the hundred administrative things that come up. Power of Attorney →
4. Power of Attorney for Education
The one families forget until they are locked out of an IEP meeting. If your child is still in school or heading into a transition program, this keeps you at the table. Power of Attorney for Education →
5. Supported Decision-Making Agreement
Formalizes who helps your child think through decisions, without taking away their right to make them. Increasingly recognized by schools, doctors, and banks. Supported Decision-Making →
6. Special Needs Trust (and your own Will)
Here is the trap: your adult child can lose SSI and Medicaid by owning more than $2,000. A well-meaning inheritance from a grandparent, a life insurance payout, or a bequest in your own will can disqualify them from the benefits they depend on.
A third-party special needs trust holds those assets for your child without the assets counting as your child’s. The money can still be spent on their life, including education, therapy, a vehicle, technology, travel, and recreation, but eligibility stays intact. Your will has to be written to point into the trust, which is why the two documents belong together.
It is not a legal document, but it may be the most important one anyway. This is where you write down everything the legal papers cannot hold: the morning routine, what calms them down, the foods they hate, the cousin they adore, what a good day looks like. Someday someone who is not you will be reading it. Get the free Letter of Intent →
Watch: Turning 18 and 22, the legal and financial changes explained
Attorney Tom Sannicandro walks through what changes at each milestone, the benefit rules that trip families up, and how the documents above fit together.
Decide the big question: guardianship, or a less restrictive path? Talk to your child’s doctors and teachers. Book a free planning session if you are unsure.
6 months before
If you are pursuing guardianship, start now. Evaluations and court schedules make this slower than anyone expects.
3 months before
Sign the HIPAA release, health care proxy, powers of attorney, and any supported decision-making agreement. Give copies to every doctor and to the school.
The birthday month
Apply, or re-apply, for SSI under adult rules. Apply to be representative payee. Register to vote. If your child is male, confirm Selective Service registration, since it affects future federal aid.
Within the first year
Put the special needs trust in place, update your own will to fund it, open an ABLE account, and write the Letter of Intent.
One more thing worth knowing about ABLE accounts
As of January 1, 2026, ABLE accounts opened up dramatically. Eligibility now extends to anyone whose disability began before age 46, up from 26. Millions of people, including a large number of veterans, became eligible this year and do not know it.
An ABLE account and a special needs trust are not competitors. The account is for everyday spending your child controls, with a debit card and a yearly contribution cap. The trust is for the large, long-term money, such as an inheritance, a home, or life insurance, and has no cap at all. The strongest plans use both. More on ABLE accounts →
What this usually costs, and what it costs here
The reason so many families arrive at the eighteenth birthday with nothing signed is not that they did not care. A law firm quoted them $3,000 to $5,000 and they put it off for a year, and then another year.
We are a 501(c)(3) nonprofit founded by a disability law attorney who is also the father of an adult son with Down syndrome. A complete personalized special needs trust and will is $189.99. The HIPAA release and the Letter of Intent are free to anyone, with no purchase. Documents are emailed to you as soon as you finish the questions. That price is possible because the nonprofit was created for exactly this purpose.
Start with the free one
If the birthday is coming and you are not sure where to begin, begin with the HIPAA release. It takes a few minutes, it costs nothing, and it is the document families tell us they wished they had the first time they stood in an emergency room and were told they were not allowed to know anything.
This article is general information about how the law works at age 18, not legal advice about your family’s situation. Rules for guardianship, powers of attorney, and healthcare directives vary by state. If your situation is complicated, or if you are weighing guardianship, talk with us or with an attorney in your state before you sign anything.
What to Do After Signing a Will and Special Needs Trust
What to Do After You Have Signed Your Will and Special Needs Trust
Congratulations on taking a major step toward protecting your family's future. Here is everything you need to do next.
Posted December 30, 2022 · By Tom Sannicandro
What To Do After You Have Signed Your Will And Special Needs Trust
Congratulations! You have taken a big step in protecting your family's future! Your wills and special needs trust will insure your loved one with a disability will be able to collect government benefits, i.e. Supplemental Security Income, Medicaid, SNAP, etc, and still have the benefit of their share of your estate, stocks, real estate holdings, 401K account, other retirement accounts, and any life insurance policy benefits.
The Steps Of What To Do After You Have Signed Your Will And Special Needs Trust
1
What To Do After Creating Your Special Needs Trust
Store your Wills and Trust safely.
Keep your original Wills and Special Needs Trust in a secure place in your home where you store important documents. An unlocked fireproof file is ideal — unlocked because your Personal Representative (Executor) must be able to access them to deliver to your lawyer or file with the court.
(You can get one by clicking here.)
Inform key people where they are.
Let your Personal Representative (Executor) and the Trustee of the Special Needs Trust know where the documents are stored and how they can access them.
Provide copies.
Give both your Personal Representative (Executor) and the Trustee of the Special Needs Trust a copy of your Will and Special Needs Trust — either in paper or electronic form.
Update your beneficiaries.
Change the beneficiaries of your retirement accounts, life insurance policies, or other brokerage accounts intended for your child with a disability to the Special Needs Trust.
Inform family members about the Trust.
Let relatives — especially grandparents, aunts, and uncles — know that you have established a Special Needs Trust for your child.
This is important to prevent them from accidentally leaving money directly to your child in their Will.
Instead, they should direct gifts or inheritances to the Trustee under "The [Your Child's Name] Trust for the benefit of [Your Child's Name]."
💡 If Grandma, Grandpa, or anyone else wants to make a gift during their lifetime:
Tell them not to give money or assets directly to your child. Any gift should go to the Special Needs Trust, so it does not affect your child's SSI or Medicaid eligibility.
For smaller gifts (under the annual gift limit), they might also consider contributing to your child's ABLE Account if one has been established.
Decide whether to fund the Trust now or later.
Most people do not fund the Special Needs Trust immediately — instead, it is typically funded after your death using the assets you've designated in your Will or beneficiary designations (such as life insurance or retirement accounts).
Do not use your child's own funds.
Never fund this trust with money or property that already belongs to your child with a disability. Those assets must go into a First-Party Special Needs Trust. (For more information, click here.)
Consider creating an ABLE Account.
Depending on the amount of assets, an ABLE Account can be a helpful, flexible supplement to a Special Needs Trust.
Opening a bank account for the Trust.
If you are funding the trust now, you will need a Tax ID Number (EIN) from the IRS. You can apply for one online
(click here to go to the IRS website),
or we can assist you with this process for a modest fee. Detailed instructions (click here)
Once you have the EIN and a copy of the trust, bring both to your bank to open the account.
Have questions? We're here to help.
If you have any questions about any of these steps, please contact us.
Need Information About Special Needs Trusts?
Our team is here to guide you every step of the way — with plain-English explanations, no legal jargon, and affordable expert support built for families like yours.
Estate Planning For Families With Special Needs Children
Show Notes
[02:54] Tom’s Journey – Tom shares why he switched his legal practice from corporate law to disability law.
[11:48] Asset Protection – Tom shares his perspective on asset protection related to individuals with disabilities.
[18:16] Finding a Trustee – Appointing a trustee for a special needs trust entails a great deal of confidence. Tom stresses the importance of selecting a suitable person to manage the trust.
[21:40] Special Needs Trust – Tom shares how he assists his clients, and what the process for setting up a special needs trust through his website looks like.
[36:08] ABLE Account – Tom discusses the functionality of an ABLE account.
[11:25] Letter of Intent – Tom and Grant discuss the purpose of a Letter of Intent.
[14:09] Medical Support vs. Financial Support – Tom shares his perspective on having an individual assisting with medical decisions simultaneously serving as the trustee.
[16:57] Future Work – Tom shares his future goals, and how he intends to continue serving his clients.
Estate Planning for Families with a Child with a Disability
November 15, 2022 – 6:30pm to 7:30pm EST
Join us as we welcome Tom Sannicandro, JD, PhD to discuss the importance of special needs trusts and wills, as well as his website which provides an easy and low cost mechanism to develop the two.
” I have been practicing disability law for more than 20 years. I am the father of an adult son with Down syndrome, so I know the challenges that families face when trying to provide a future for all their children. After retiring from the practice of law, I thought the best way to give back would be to provide estate planning documents for families with a child with special needs in an easy and affordable way.
There are benefits of drafting your estate plan and special needs trusts together. My easy-to-use form does all the hard work for you and sets up the most benefits for your child’s future.
I also provide legal documents that helps protect someone with disabilities by ensuring that they get the assistance of someone they trust.“
Have you ever thought about what happens after you die? What would happen to your possessions, family, and friends? Will they inherit anything or will it go back to the state?
The law of wills is a legal term referring to the document that states who gets what after someone dies. In other words, it is a written statement that describes how your assets should be distributed after you pass away.
A will is a very important part of estate planning. Without a valid will, your property will be divided according to the laws of intestacy. This means that your property will be shared between your spouse, children, parents, siblings, and other relatives.
If you have a child with special needs it is critically important. It is important that your estate plan, insurance policies, and retirement plans that could bring your child with special needs assets to an amount greater than $2,000, be given to the special needs trust, and not directly to the child with special needs. If a person is receiving government benefits such as Supplemental Security Income, Medicaid, housing, and or food assistance, assets over $2,000 not held in a Special Needs Trust could jeapordize their benefits. Find out more.
An Overview Of How Important Is Your Will
A will is a foundational document in estate planning that outlines your wishes regarding the distribution of your assets after your passing. Its importance cannot be overstated, as it serves several critical purposes that extend far beyond simply dividing your property. Firstly, a will allows you to designate beneficiaries for your assets, ensuring that your possessions go to the individuals or organizations you choose. This aspect is especially crucial for individuals with specific wishes, such as providing for family members, friends, or charitable causes.
Moreover, a will enables you to appoint guardians for minor children, should something happen to you and your co-parent. This ensures that your children are placed in the care of individuals you trust and who share your values and parenting philosophies. Without a will, the decision of who will care for your children could be left to the court, potentially leading to disagreements among family members and uncertainty about your children’s future.
Additionally, a will allows you to name an executor, the individual responsible for managing your estate and ensuring that your wishes are carried out. This executor plays a crucial role in overseeing the distribution of your assets, paying off debts and taxes, and handling any legal proceedings related to your estate. By appointing an executor in your will, you can provide clarity and guidance for the administration of your estate, reducing the burden on your loved ones during an already challenging time. Overall, a will is a fundamental tool for protecting your assets, providing for your loved ones, and ensuring that your wishes are honored long after you’re gone.
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