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Caring for a child with a disability often means thinking several steps ahead. As a parent, one of your greatest concerns may be what happens when you’re no longer here to provide for them. Among the most important choices you’ll face is how to leave an inheritance that offers support without putting their vital benefits at risk.
In Louisiana, this requires more than drafting a standard will. Because our state’s inheritance laws and federal benefit programs overlap, a well-intentioned gift could have unintended consequences. With the right legal tools in place, though, you can protect your child’s eligibility for assistance and create lasting financial security for the future.
How Inheritance Affects Public Benefits
Many children with special needs rely on government benefits like Supplemental Security Income (SSI), Medicaid, or housing assistance. These programs have strict income and asset limits. Even a small inheritance can put those benefits at risk.
If a child receives money directly through a will, retirement account, or life insurance policy, that amount may be counted against them. In some cases, it can trigger a loss of eligibility for services your child depends on.
It’s not about the size of the gift. It’s about how that gift is structured. Traditional estate planning tools often fall short when it comes to protecting children with disabilities. That’s why it’s important to use strategies that take these rules into account.
Using a Special Needs Trust
One of the most effective tools available is a special needs trust, also known as a supplemental needs trust. This type of trust holds assets for the benefit of your child without giving them direct control or ownership. That way, they can continue receiving government benefits while still having access to funds for other needs.
A trustee, usually a family member, friend, or professional, manages the money and uses it to support your child. These funds can be used for things like:
- Therapies not covered by Medicaid
- In-home support services
- Travel and entertainment
- Assistive technology
- Personal items, education, and more
The trust is tailored to meet your child’s unique needs and circumstances. In Louisiana, we can set up a third-party special needs trust using your assets, or a first-party trust if the child already owns funds (for example, from a lawsuit settlement). Both types follow specific rules, and we can help make sure the trust is drafted properly.
Forced Heirship in Louisiana
Louisiana’s laws differ from those of other states in several ways, including how inheritance is handled. We have something called “forced heirship.” This means that certain children are legally entitled to a portion of your estate, even if your will says otherwise.
If your child has a permanent mental or physical disability that keeps them from being able to care for themselves, they may be considered a forced heir, no matter how old they are. This could automatically give them a share of your estate, which could interfere with their benefits.
Fortunately, it’s still possible to plan around this. By using a special needs trust and working within the forced heirship rules, we can ensure your child receives their inheritance in a protected way. It takes thoughtful planning, but it’s entirely possible under Louisiana law.
Other Helpful Tools and Considerations
A special needs trust is often the foundation of the plan, but it’s not the only option available. Some families also choose to use:
- ABLE Accounts: These allow individuals with disabilities to save money without affecting benefits, up to certain limits.
- Letter of Intent: While not legally binding, this document can provide guidance to future caregivers about your child’s routines, preferences, and medical needs.
- Tutorship or Interdiction: If your child cannot make legal or financial decisions as an adult, you may need to seek legal authority to continue helping them.
- Family Coordination: Talk to grandparents and other relatives before they leave money to your child directly. A well-meaning gift could unintentionally create problems.
Every family’s situation is different. What works well for one child might not be right for another. We’ll take the time to learn about your family and help you create a plan that suits your needs.
Building a Safer Future for Your Child
You’ve worked hard to provide a safe and loving home for your child. Planning for the future is one more way you can continue to protect them, even when you’re no longer here.
At Kallio Law Firm, LLC, we understand how Louisiana law works and how to design inheritance plans that support your child’s needs without disrupting their benefits. We’ll help you put the right protections in place so you can feel confident about the future.
Ready to start the conversation? Contact us to schedule a consultation.
