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If you have a family member with disabilities, it’s very likely that he or she will rely on certain “means-tested” benefits for life. These means-tested benefits include subsidized health insurance (Medicaid), Supplemental Security Income (SSI), and other state and local level benefits such as employment assistance and support.

Specific Medicaid eligibility limits vary by state. But in general, your child cannot own more than about $2,000 in their own name without losing those benefits. There are also strict limits to income, as well.

If your child receives too much money directly, they could be disqualified from assistance. They won’t be eligible again until they spend down their money back to the poverty level again.

Special needs planning uses ABLE accounts, special needs trusts, life insurance, Medicaid qualified annuities, and other tools to provide for lifelong support of disabled children and adults – ideally for long after their parents or guardians pass away.