Ohio Special Needs Planning

We are a virtual firm serving families in all 88 Ohio counties, and special needs planning is counseled the same way as the rest of an estate plan: strategy before drafting. Special needs planning is the work of arranging a family’s resources so a loved one with a disability is provided for across their lifetime, without disqualifying them from the means-tested benefits, such as Supplemental Security Income and Medicaid, that support their care. It is estate planning for the whole family, held under one relationship rather than treated as a separate matter.

What is special needs planning in Ohio?

Special needs planning is the legal work of providing for a person with a disability without jeopardizing the government benefits their care depends on. It combines a special needs trust, ABLE savings, a letter of intent, coordinated beneficiary designations, and, where appropriate, guardianship or a less restrictive alternative, shaped into one plan for the family.

The reason it takes a plan rather than a single gift is that many disability benefits are means-tested. Programs such as Supplemental Security Income (SSI) and Medicaid limit the countable resources a recipient may hold, commonly to $2,000 for an individual. A well-meaning inheritance, a gift from a grandparent, or a life insurance payout left directly to the person can push them over that limit and interrupt the benefits that fund their housing, therapies, and medical care. Special needs planning routes that support around the limit instead of into it.

What is a special needs trust, and what is the difference between the two kinds?

A special needs trust, sometimes called a supplemental needs trust, holds assets for a person with a disability so a trustee can pay for goods and services that improve their life without the funds counting as the person’s own resource for SSI or Medicaid. There are two kinds, and the difference is whose money funds the trust.

• Third-party special needs trust. Funded with someone else’s assets, typically a parent’s or grandparent’s, for the benefit of the person with a disability. This is the heart of family special needs planning. Because the money was never the beneficiary’s, a properly drafted third-party trust generally carries no Medicaid payback requirement, so whatever remains at the beneficiary’s death can pass to other family members the family chooses.
• First-party, or self-settled, special needs trust. Funded with the person’s own assets, for example a personal injury settlement or an inheritance already left in their name. Federal law authorizes this trust under 42 U.S.C. 1396p(d)(4)(A), it must generally be established while the person is under 65, and it must repay Medicaid from what remains at death. A pooled trust under (d)(4)(C) is a related option.

The first-party trust overlaps with Medicaid and injury work, and the mechanics are covered on the elder law asset protection page. For families planning ahead for a child or relative, the third-party trust is usually the center of the plan.

Who should be the trustee, and when does a pooled trust make sense?

The trustee of a special needs trust carries unusual responsibility: they control every dollar the beneficiary receives, have to understand how each distribution interacts with SSI and Medicaid rules, and may serve for the beneficiary’s entire life. A family member knows the person best but may lack the benefits expertise, or may not outlive the beneficiary. A professional or corporate trustee brings continuity and rule-fluency but less personal knowledge. Many families pair the two: a professional trustee for administration, a family member as trust protector or advisor, and a detailed letter of intent to carry the personal knowledge forward.

A pooled special needs trust is often the answer when no suitable individual trustee is available or the amount is modest. A nonprofit organization runs the trust, pools many beneficiaries’ funds together for investment while keeping a separate sub-account for each person, and administers distributions under the same benefit rules an individual trust follows. Authorized federally under 42 U.S.C. 1396p(d)(4)(C), a pooled trust can hold either third-party or first-party money, spreads professional-trustee costs across many families, and is frequently the practical choice for a smaller inheritance or a beneficiary with no family member able to serve. First-party pooled sub-accounts carry a Medicaid payback, and in many pooled programs what stays with the nonprofit at the beneficiary’s death supports its charitable work.

How do you leave money to a person with disabilities without losing benefits?

You leave it to a properly drafted third-party special needs trust rather than to the person directly, and you coordinate every account and policy so nothing lands in their name by accident. The trust holds the inheritance, and a trustee spends it on the person’s behalf for needs benefits do not cover.

This coordination step is where plans most often fail. A family can set up an excellent special needs trust and still undo it by naming the person with a disability as a direct beneficiary on a retirement account, a life insurance policy, or a payable-on-death account. Those designations pass outside the will and the trust, so each one has to be redirected to the trust. Grandparents and other relatives who intend to leave the person a gift should be guided to leave it to the trust as well, not to the individual.

What can a special needs trust pay for?

A special needs trust pays for goods and services that supplement, rather than replace, what public benefits already provide. Because SSI and Medicaid cover a defined set of basic needs, the trust is used for the many things that make a life fuller, and a knowledgeable trustee keeps those distributions within the benefit rules.

Commonly, a special needs trust can pay for:

• Therapies, medical and dental care, and equipment not covered by Medicaid
• Education, training, and job coaching
• Transportation, including a vehicle
• Personal care attendants and companionship
• Recreation, travel, technology, and hobbies
• Home furnishings and improvements

Distributions for food and shelter are handled carefully, because they can reduce an SSI payment, and the trustee weighs each one against the benefit rules. The trustee’s judgment matters as much as the document, which is why choosing and supporting the trustee is part of the planning conversation.

What is an ABLE account, and how does it fit with a special needs trust?

An ABLE account is a tax-advantaged savings account for a person whose disability began before a set age, that lets them hold savings without those funds counting against SSI or Medicaid up to program limits. Contributions are capped each year, with a standard limit of $20,000 in 2026. In Ohio the program is the STABLE Account, administered by the Ohio Treasurer. It works alongside a special needs trust, not instead of it.

The two tools do different jobs. An ABLE account gives the person a measure of independence and direct control over modest funds, useful for everyday expenses. A special needs trust holds larger sums under a trustee’s management and does the heavy lifting of a lifetime plan. Eligibility to open an ABLE account currently reaches people whose disability began before age 46, raised from 26 effective in 2026, which widened the group of Ohioans who can use one. Many plans use both: the trust as the foundation, the ABLE account for flexibility.

What is a letter of intent, and why does it matter?

A letter of intent is a non-legal document written by the family that tells future caregivers and trustees who the person is: their routines, preferences, medical history, the people who matter to them, and the family’s hopes for their care. It carries no legal force, but it is often the most valued piece of the plan.

The trust says what the money may be spent on. The letter of intent says what a good day looks like, which foods the person loves, how they communicate when they are anxious, and what the family has learned across years of care that no document could otherwise capture. It is written by the family, kept with the plan, and updated over time, so that if the parents are no longer there to explain, the person’s life can continue with as little disruption as possible.

What happens at age 18, and does the family need guardianship?

When a child with a disability turns 18, they become a legal adult, and a parent’s authority to make medical, financial, and educational decisions ends unless a legal arrangement extends it. Ohio families address this through guardianship or, where the person’s capacity allows, a less restrictive alternative such as powers of attorney or supported decision making.

Guardianship, governed by Ohio’s guardianship statutes at R.C. Chapter 2111, is a court process in which someone is appointed to make decisions for an adult found to lack the capacity to make them alone. Because guardianship removes rights, Ohio law favors the least restrictive option that still keeps the person safe. For some young adults, a healthcare power of attorney, a financial power of attorney, and a HIPAA authorization are enough. For others, guardianship of the person, the estate, or both is appropriate. The plan is shaped to the individual, not to a default. We do this planning work, including the special needs trust together with powers of attorney and a HIPAA authorization where they fit. We do not handle guardianship proceedings in probate court; when guardianship is the right step, we help the family recognize it and coordinate a referral to counsel who handles it.