Wills vs. Trusts for Special Needs Children: What’s the Best Option?
We know how important it is to plan carefully for the future of a child with special needs. Every decision we make in trust and estate planning should center around long-term stability, legal protection, and preserving eligibility for essential public benefits.
Many families come to us with the same question: Should we create a will or set up a trust? Both tools have their place, but when caring for a loved one with special needs, the details matter. While wills and trusts are both used in trust and estate planning, they serve very different functions.
At Baker & Baker Elder Law, we believe choosing the right path forward starts with understanding how each option works, what they can and can’t do, and how they might affect your child’s access to critical support programs like Medicaid or Supplemental Security Income (SSI).
What a Will Does in Trust and Estate Planning
A will is a legal document that explains how we want our property distributed after we die. It can also name guardians for minor children and include specific instructions for certain assets. For families with special needs children, a will is often a starting point but not a complete solution.
Wills go through probate, which means the court supervises the distribution of assets. That process can take months or even years, depending on the estate. While that delay may not matter in every case, it can affect the timely care and support of a child with ongoing needs.
More importantly, any direct inheritance passed through a will could disqualify a child from public benefits. This is where many families run into trouble. A well-meaning gift could unintentionally harm long-term support.
What a Trust Offers for Special Needs Families
A trust is a legal arrangement where one party holds and manages assets on behalf of another. Trusts can be created during life (living trusts) or upon death (testamentary trusts).
When we work with families focused on trust and estate planning, we often recommend a special needs trust if a child receives government assistance.
Special needs trusts allow us to set aside funds for the benefit of a child without affecting their eligibility for benefits. These trusts are carefully structured so that the assets are not counted as the child’s own. That means Medicaid, SSI, and other programs can continue uninterrupted.
There are different types of special needs trusts, including:
First-party special needs trusts: Funded with the child’s own money (for example, from a settlement or inheritance)
Third-party special needs trusts: Funded by parents, grandparents, or others
Pooled trusts: Managed by nonprofit organizations and combine funds from multiple families
Each option works a bit differently, but all share the same goal: to supplement government benefits without replacing or jeopardizing them.
Comparing Wills and Trusts for Special Needs Planning
To make the right choice for your child, it helps to look at how wills and trusts compare in real terms.
How Assets Are Distributed
Wills: Distribute assets outright to the beneficiaries
Trusts: Allow for managed, scheduled, or conditional distribution
How They Affect Public Benefits
Wills: Can disqualify a child from Medicaid or SSI if not carefully drafted
Special needs trusts: Preserve benefit eligibility while still providing support
Probate Involvement
Wills: Go through probate, which can delay access to funds
Trusts: Often avoid probate, giving faster and more private asset transfers
Flexibility and Management
Wills: Static, can only be changed through legal amendments
Trusts: More flexible and can be structured to change over time
For many families, trusts offer greater control and better protection. That doesn’t mean wills aren’t useful; we still use them to appoint guardians, address specific property issues, and tie into other estate planning tools. But for managing money on behalf of a child with disabilities, a trust is often a safer route.
How Special Needs Trusts Work
To understand why special needs trusts are so valuable in trust and estate planning, it helps to look at how they function. These trusts are set up with a trustee—someone responsible for managing the funds. That person can be a family member, a lawyer, or a professional fiduciary.
The trustee uses the funds to pay for things that enhance the child’s life but aren’t covered by public assistance. That might include:
Educational programs: Special education services, tutoring, or private schools
Transportation needs: Vehicles, travel for treatment, or adapted transit options
Therapy and care: Services not fully covered by Medicaid, like occupational or speech therapy
Technology and equipment: Communication tools, wheelchairs, or sensory devices
Recreational activities: Summer camps, hobbies, or outings that support quality of life
Since the assets in the trust are not considered the child’s property, they don’t interfere with income or asset limits tied to benefit programs.
What to Include in a Will if You’re Also Creating a Trust
If we create a special needs trust, we still use a will to support the plan. A will can:
Name a guardian: This is especially important if the child is under 18
Create a testamentary trust: That means the trust only forms after we pass away
Transfer assets to an already existing trust: Known as a pour-over will
A trust works best when it's paired with a coordinated, written will. That way, we know assets will flow into the right channels and continue supporting the child’s needs.
Avoiding Common Mistakes in Trust and Estate Planning
Many parents want to do the right thing, but don’t realize that even small mistakes can affect their child’s long-term support. Some of the most common missteps we see include:
Leaving money directly to the child: This can instantly cause a loss of benefits
Failing to name a trustee: Without one, there's no one to manage the funds
Not updating beneficiary designations: Insurance policies, retirement accounts, and other assets need to match the trust plan
Overlooking the will: Even with a trust, we need a will to guide and support the plan
Our firm helps families work through these details to make sure everything works together.
When a Will Alone Might Be Enough
There are rare situations where a trust may not be necessary, such as when the child with special needs is unlikely to qualify for means-tested benefits or when very few assets are involved. In these cases, a carefully drafted will may be sufficient. But even then, we typically revisit the plan every few years to make sure nothing has changed.
Trust and estate planning isn’t static. As your child grows, their needs may evolve. So should the plan.
Why We Recommend Trusts for Special Needs Children
In most situations, we recommend a special needs trust as part of a full trust and estate planning strategy. The advantages include:
Preserving benefits: Keeps eligibility for SSI, Medicaid, and other supports
Protecting assets: Shields funds from misuse or mismanagement
Providing guidance: Allows you to leave instructions for future caregivers
Offering peace of mind: You’ll know your child is cared for, even after you’re gone
It’s also worth mentioning that trusts can support more than just financial needs. They can reflect our values, our goals, and our hopes for our children’s future. With the right language, we can specify how funds should be used, when they should be distributed, and who should make those decisions.
How We Approach Trust and Estate Planning at Our Firm
At Baker & Baker Elder Law, our approach is highly personal. We take the time to understand each family’s goals, financial situation, and long-term needs. That means:
Reviewing your current assets: We look at what you have and how it's held
Evaluating benefit eligibility: To make sure your plan won’t cause problems later
Drafting trusts and wills together: So they work as a coordinated system
Helping select trustees and guardians: People who can carry out your wishes
Reviewing and updating your plan regularly: Because life changes, and so should your documents
We approach trust and estate planning as an ongoing relationship, not a one-time transaction. When a child with special needs is involved, consistency matters.
Speak to a Trust and Estate Planning Lawyer
If you're thinking about how to protect your child with special needs, we can help you understand your options and create a plan that works for your family.
At Baker & Baker Elder Law, we proudly serve families across Corpus Christi, Texas. Let’s work together to protect what matters most and secure your peace of mind for the future.
