Grandparents: The Do’s and Don’ts of Planning for Your Grandchild with Special Needs

Grandparents want the best for their children and grandchildren. They often worry about a grandchild with a disability, who may need additional assets or assistance to enjoy a good quality of life. Those in a position to leave money are often told not to leave their grandchild with disabilities anything because the child may lose government benefits. People are often confused about what to do or not do.


Make provisions for your grandchild(ren) with special needs. Leave money to the child’s special needs trust. The special needs trust is the only way to leave money without losing government benefits.

Coordinate all planning with the child’s parents or other relatives. Notify the parents when you plan for grandchild(ren). Plan with others.

Leave life insurance, survivorship whole life policies, and annuities to the child’s special needs trust. The special needs trust can be named as the policy beneficiary. When the insured or annuitant dies, the death benefit is paid to the special needs trust. The trust then has a lump sum of money to be used in caring for the grandchild(ren) with special needs.

Consult with trained financial and legal professionals with specialities in special needs estate planning.


Don’t disinherit your grandchild(ren) with special needs. Money can be left to a properly drawn special needs trust.

Don’t give money to your grandchild(ren) with special needs under UGMA or UTMA (Uniform Gift or Transfer To Minors Act). Money automatically belongs to the child(ren) upon reaching legal age. Government benefits can be lost.

Don’t leave money to grandchild(ren) with special needs through a will. Money left will be a countable asset of the child and may cause the loss of government benefits.

Don’t leave money to a poorly set-up trust. Money left in an improperly drafted trust can result in the loss of government benefits.

Don’t leave money to relatives to keep or hold for the child with special needs. The money can be attached to a lawsuit, divorce, liability claim, or other judgment against the relative.

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