Special Needs Estate Planning in North Carolina

Serving Clients throughout Wilmington North Carolina and the Surrounding Areas


Special Needs Estate Planning focuses on providing for the special needs of our loved ones with disabilities when we are no longer there to organize and advocate on their behalf. Parents of children with special needs must make careful estate planning choices to coordinate all of the legal, financial, and special care needs of their children – both now and in the future.

An Overview of Special Needs Trusts


There are several types of trusts to assist with these special planning challenges. The most common types are Support Trusts and Special (or Supplemental) Needs Trusts.

  • Support Trusts:  Support Trusts require the Trustee to make distributions for the child’s support in areas like food, shelter, clothing, medical care, and educational services. Beneficiaries of Support Trusts are not eligible to receive financial assistance through Supplemental Security Income (SSI) or Medicaid. If your child will require SSI or Medicaid, you should avoid a Support Trust.

  • Special (or Supplemental) Needs Trusts:  For many parents, a Special Needs Trust is the most effective way to help their child with a disability. A Special Needs Trust manages resources while also maintaining the child’s eligibility for public assistance benefits such as Medicaid, Social Security Disability Insurance or Supplemental Security Income. Assets placed in a special needs trust are distributed on behalf of the mentally or physically disabled individual at the discretion of the trustee, which is usually a parent or other family member. The money cannot be used for basic needs that are covered by public benefits, but is intended to supplement those benefits and can be used for things such as vacation, restaurant meals, sporting goods, social outings, legal fees and medical costs not covered by the benefits already in place.

Types of Special (or Supplemental) Needs Trusts include:

  • Third-Party Special Needs Trust:  Created using the assets of the parent(s) as part of an estate plan; distributed by a Will or Living Trust.

  • Self-Settled Special Needs Trust: Generally created by a parent, grandparent or legal guardian using the child’s assets to fund the Trust (e.g., when the child receives a settlement from a personal injury lawsuit and will require lifelong care). If assets remain in the Trust after the child’s death, a payback to the state is required, but only to the extent the child receives public assistance benefits.

  • A Pooled Trust, also known as a "(d)(4)(C) trust," is a special needs trust with a twist. While an individual special needs trust is created for one's self or by someone for the benefit of a specific beneficiary who is often a family member, a pooled trust is established by a non-profit organization, with individual beneficiaries creating accounts within the larger trust. In other words, the assets of many people with special needs are "pooled." Because a pooled trust accepts contributions from many beneficiaries, the trust is able to make more stable investments and provide additional management services that a plain vanilla special needs trust might not be able to afford. On top of these benefits, transfers into a pooled trust, like transfers into a first-party special needs trust, do not prevent a person with special needs from accessing government benefits and the funds in a pooled trust are used to supplement a beneficiary's government benefits, and the funds can be used to pay for recurring bills, clothes, and other expenses. Although the funds placed in a pooled trust are invested together, each beneficiary's account remains his own.

  • **VERY IMPORTANT TO NOTE: The Special Needs Trust Fairness Act, federal legislation that allows people with disabilities to create their own special needs trusts instead of having to rely on others, is now law. The measure was included in the 21st Century Cures Act, a $6.3 billion package of health-related initiatives signed by President Obama on December 13, 2016. The Fairness Act, introduced in 2013 by Rep. Glenn Thompson (R-Pa.), fixes an especially frustrating drafting error in the Social Security Act that has prevented people with disabilities from creating special needs trusts to hold their own funds. The Special Needs Trust Fairness Act inserts language into the Social Security Act to give individuals with special needs the same right to create a trust as a parent, grandparent, guardian, or court. If competent to do so, persons with disabilities that are over the age of eighteen can now create a trust on their own behalf using their own assets--hence protecting their assets while preserving their public benefits.

Special Needs Trusts are a critical component of your estate planning if you have a disability or if you have loved ones with disabilities for whom you wish to provide after your passing. Generally, Special Needs Trusts are either stand-alone trusts funded with separate assets (like life insurance) or they can be sub-trusts in existing living trusts. 

Special Needs Estate Planning Online Resource Center


Planning for your loved one with special needs requires extensive research to become a well-educated advocate. You will want to keep up-to-date on the latest medical, educational, financial, and legal changes. Salines-Mondello Law Firm, PC provides assistance to you and your family in addressing your unique concerns. We hope this Special Needs Resource Center provides you with a quick reference to find the additional resources you may need.

  • Social Security Resources:
    Benefits for Children with Special Needs
    Social Security Benefits Eligibility Screening Tool
  • Handbook for Trustees: A special needs trust can be a very powerful aid in managing care for a family member with a disability. It can provide supplemental items like therapy, respite care, dental work, companions, entertainment, education — all without interfering with the beneficiary’s SSI, Medicaid or other government programs. The special needs trust can be a flexible tool. It can also be very difficult and confusing to administer. Download a free copy of the Handbook for Trustees
  • Exceptional Parent online: Online resource for the special needs community, including families, caregivers, physicians, allied healthcare professionals, and teachers.
  • The Arc: The Arc is a national organization of and for people with mental disabilities and related developmental disabilities and their families. The Arc works to promote and improve support and services for people with mental disabilities and their families and also fosters research into and education about the prevention of these disabilities in infants and young children.
  • National Academy of Elder Law Attorneys: The National Academy of Elder Law Attorneys is a non-profit association that assists lawyers, bar organizations and others who work with older clients and their families. The Academy provides information, education, networking and assistance to those who deal with the many specialized issues involved with legal services to the elderly and people with special needs.
  • National Alliance on Mental Illness: The National Alliance on Mental Illness (NAMI) is dedicated to improving the lives of persons living with serious mental illness and their families. There are NAMI organizations in every state and in over 1,100 local communities across the country.
  • Center for Parent Information and Resources: The Center for Parent Information and Resources (CPIR) serves as a central resource of information and products to the community of Parent Training Information (PTI) Centers and the Community Parent Resource Centers (CPRCs), so that they can focus their efforts on serving families of children with disabilities. Use this interactive map to find the PTI or CPRC that serves your State or territory.
  • Annual Disability Statistics Compendium: This publication, the first Compendium, focuses on state-level statistics published by Federal agencies.

Calculating Your Loved One’s Future Financial Needs


This calculator can help you project the future expenses of an individual with special needs.

  • Special Needs Planning

    An Overview of Special Needs Estate Planning


    There are several types of trusts to assist with these special planning challenges. The most common types are Support Trusts and Special Needs Trusts.

    • Support Trusts:  Support Trusts require the Trustee to make distributions for the child’s support in areas like food, shelter, clothing, medical care, and educational services. Beneficiaries of Support Trusts are not eligible to receive financial assistance through Supplemental Security Income (SSI) or Medicaid. If your child will require SSI or Medicaid, you should avoid a Support Trust.

    • Special (or Supplemental) Needs Trusts:  For many parents, a Special Needs Trust is the most effective way to help their child with a disability. A Special Needs Trust manages resources while also maintaining the child’s eligibility for public assistance benefits such as Medicaid, Social Security Disability Insurance or Supplemental Security Income. Assets placed in a special needs trust are distributed on behalf of the mentally or physically disabled individual at the discretion of the trustee, which is usually a parent or other family member. The money cannot be used for basic needs that are covered by public benefits, but is intended to supplement those benefits and can be used for things such as vacation, restaurant meals, sporting goods, social outings, legal fees and medical costs not covered by the benefits already in place.

    Types of Special (or Supplemental) Needs Trusts include:

    • Third-Party Special Needs Trust:  Created using the assets of the parent(s) as part of an estate plan; distributed by a Will or Living Trust.

    • Self-Settled Special Needs Trust: Generally created by a parent, grandparent or legal guardian using the child’s assets to fund the Trust (e.g., when the child receives a settlement from a personal injury lawsuit and will require lifelong care). If assets remain in the Trust after the child’s death, a payback to the state is required, but only to the extent the child receives public assistance benefits.

    • A Pooled Trust, also known as a "(d)(4)(C) trust," is a special needs trust with a twist. While an individual special needs trust is created for one's self or by someone for the benefit of a specific beneficiary who is often a family member, a pooled trust is established by a non-profit organization, with individual beneficiaries creating accounts within the larger trust. In other words, the assets of many people with special needs are "pooled." Because a pooled trust accepts contributions from many beneficiaries, the trust is able to make more stable investments and provide additional management services that a plain vanilla special needs trust might not be able to afford. On top of these benefits, transfers into a pooled trust, like transfers into a first-party special needs trust, do not prevent a person with special needs from accessing government benefits and the funds in a pooled trust are used to supplement a beneficiary's government benefits, and the funds can be used to pay for recurring bills, clothes, and other expenses. Although the funds placed in a pooled trust are invested together, each beneficiary's account remains his own.

    • **VERY IMPORTANT TO NOTE: The Special Needs Trust Fairness Act, federal legislation that allows people with disabilities to create their own special needs trusts instead of having to rely on others, is now law. The measure was included in the 21st Century Cures Act, a $6.3 billion package of health-related initiatives signed by President Obama on December 13, 2016. The Fairness Act, introduced in 2013 by Rep. Glenn Thompson (R-Pa.), fixes an especially frustrating drafting error in the Social Security Act that has prevented people with disabilities from creating special needs trusts to hold their own funds. The Special Needs Trust Fairness Act inserts language into the Social Security Act to give individuals with special needs the same right to create a trust as a parent, grandparent, guardian, or court. If competent to do so, persons with disabilities that are over the age of eighteen can now create a trust on their own behalf using their own assets--hence protecting their assets while preserving their public benefits.

    Special Needs Trusts are a critical component of your estate planning if you have a disability or if you have loved ones with disabilities for whom you wish to provide after your passing. Generally, Special Needs Trusts are either stand-alone trusts funded with separate assets (like life insurance) or they can be sub-trusts in existing living trusts.

  • Resources

    Special Needs Estate Planning Online Resource Center


    Planning for your loved one with special needs requires extensive research to become a well-educated advocate. You will want to keep up-to-date on the latest medical, educational, financial, and legal changes. Salines-Mondello Law Firm, PC provides assistance to you and your family in addressing your unique concerns. We hope this Special Needs Resource Center provides you with a quick reference to find the additional resources you may need.

    • Social Security Resources:
      Benefits for Children with Special Needs
      Social Security Benefits Eligibility Screening Tool
    • Handbook for Trustees: A special needs trust can be a very powerful aid in managing care for a family member with a disability. It can provide supplemental items like therapy, respite care, dental work, companions, entertainment, education — all without interfering with the beneficiary’s SSI, Medicaid or other government programs. The special needs trust can be a flexible tool. It can also be very difficult and confusing to administer. Download a free copy of the Handbook for Trustees
    • Exceptional Parent online: Online resource for the special needs community, including families, caregivers, physicians, allied healthcare professionals, and teachers.
    • The Arc: The Arc is a national organization of and for people with mental disabilities and related developmental disabilities and their families. The Arc works to promote and improve support and services for people with mental disabilities and their families and also fosters research into and education about the prevention of these disabilities in infants and young children.
    • National Academy of Elder Law Attorneys: The National Academy of Elder Law Attorneys is a non-profit association that assists lawyers, bar organizations and others who work with older clients and their families. The Academy provides information, education, networking and assistance to those who deal with the many specialized issues involved with legal services to the elderly and people with special needs.
    • National Alliance on Mental Illness: The National Alliance on Mental Illness (NAMI) is dedicated to improving the lives of persons living with serious mental illness and their families. There are NAMI organizations in every state and in over 1,100 local communities across the country.
    • National Dissemination Center for Children with Disabilities: The National Dissemination Center for Children with Disabilities (NICHCY) serves as a central source of information on disabilities in children and youth. The NICHCY Web site has a State Organization - Search by State tool to assist you in finding contact information for disability-related organizations in every state.
    • Annual Disability Statistics Compendium: This publication, the first Compendium, focuses on state-level statistics published by Federal agencies.
  • Calculators

    Calculating Your Loved One’s Future Financial Needs


    These calculators can help you project the future expenses of an individual with special needs.

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