Special Needs Planning in Washington
When you love someone with a disability, estate planning carries a weight other families never feel. The question is not just who inherits, but how a loved one will be cared for, housed, and supported for a lifetime, without an inheritance accidentally destroying the government benefits they depend on. Special needs planning solves that problem with purpose-built tools. It is a core focus of Latterell Law’s practice, and a Seattle special needs trust lawyer can help you build a plan that protects both the inheritance and the benefits.
Why an Ordinary Inheritance Can Cause Harm
Means-tested benefits such as Supplemental Security Income (SSI) and Medicaid come with strict resource limits, generally just $2,000 in countable assets for an SSI recipient. A well-meaning gift or direct inheritance, even a modest one, can push a loved one over that limit, suspending cash benefits and jeopardizing the healthcare coverage and support services that matter far more than the money itself. The same danger hides in beneficiary forms: naming a loved one with a disability directly on a life insurance policy or retirement account can trigger the identical problem, which is why designations must be coordinated as described in our beneficiary designations guide.
Special Needs Trusts
A special needs trust (also called a supplemental needs trust) holds assets for the benefit of a person with a disability without those assets counting against benefit eligibility. The trustee uses trust funds to supplement, not replace, government benefits, paying for things benefits do not cover: therapies, education, travel, technology, personal care, and quality of life.
Two main types matter:
- Third-party special needs trusts are funded with someone else’s assets, typically a parent’s or grandparent’s, through an estate plan or life insurance. Because the assets never belonged to the beneficiary, no Medicaid payback is required at the beneficiary’s death; remaining funds can pass to other family members.
- First-party special needs trusts are funded with the beneficiary’s own assets, such as a personal injury settlement or an inheritance received outright. These trusts must include a payback provision reimbursing the state for Medicaid benefits paid during the beneficiary’s life.
For most parents planning ahead, the third-party trust is the centerpiece, and getting it drafted and funded correctly is exactly the work described on our special needs estate planning for parents page.
ABLE Accounts
The Washington State ABLE Savings Plan gives eligible individuals whose disability began before age 46 a tax-advantaged account for disability-related expenses. Up to $100,000 in an ABLE account is disregarded for SSI purposes, and Medicaid eligibility is not affected by the balance. Contributions are capped annually, and the beneficiary can control their own account, which supports independence in a way a trust does not.
ABLE accounts and special needs trusts are partners, not competitors. Many families use an ABLE account for day-to-day flexibility and a special needs trust for larger, long-term assets, with the trust sometimes funding the ABLE account over time.
The Letter of Intent
A letter of intent is not a legal document, but it may be the most valuable thing you write. It tells future caregivers and trustees everything the legal documents cannot: your loved one’s routines, medical providers, medications, likes and fears, communication style, and your hopes for their life. Update it regularly and keep it with your estate plan so the people who step in can do so with understanding, not guesswork.
Guardianship, Alternatives, and Adult Children
When a child with a disability approaches 18, parents must decide whether guardianship, a less-restrictive alternative such as supported decision-making or powers of attorney, or no formal arrangement best fits their child’s abilities. And planning is not only for those with significant impairments: even a high-functioning adult may benefit from trust protections, a question we explore in our article on special needs trusts for highly functional adults. Families weighing court-based options can learn more from our Seattle guardianship lawyer page.
A Plan for the Whole Family
Special needs planning touches every part of your estate plan: your will and trusts, beneficiary designations, guardian nominations, and the instructions you leave behind. It also benefits from coordination with siblings and extended family, so a grandparent’s generous gift lands in the trust rather than in the beneficiary’s name.
Talk to a Washington Special Needs Planning Attorney
Founder Angel M. Latterell has spent more than 20 years helping Washington families plan for loved ones with disabilities, preserving benefits while providing for a lifetime of care and quality of life. Contact Latterell Law today to schedule a consultation.
