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Grandparents: Plan for your grandkids’ future

Grandparents want the best for their grandchildren and often give gifts while alive or make provisions for their loved ones for after they are deceased.

Grandparents who are in a position to leave money or assets often want to do something for their grandchild(ren) who has special needs. They often worry that their loved one may need additional assets or assistance to lead a quality life. Grandparents are sometimes told not to leave their grandchild(ren) with special needs anything because the grandchild(ren) may lose government benefits. People are often confused as to what to do or not to do.

Grandparents can leave money to their grandchild(ren) with special needs. There are very special ways to do it!  Money has to be left in such a way so that government benefits are not lost. In most states, assets in excess of $2,000 will cause the loss of certain government benefits for a person with a disability.

Money should not be left to the grandchild directly, but should be left to a special needs trust. The special needs trust was developed to manage resources while maintaining the individual’s eligibility for government benefits. The trust is maintained by a trustee on behalf of the person with special needs. The trustee has discretion to manage the money in the trust and decides how the money is used. The money must be used for supplemental purposes only. It should only supplement, or add to benefits (food, shelter or clothing) that the government already provides through Supplementary Security Income (SSI). It must not supplant or replace government benefits. If properly structured by a knowledgeable special needs attorney, the special needs trust assets will not count towards the $2,000 SSI limits for an individual.

Here’s a brief summary of some Dos and Don’ts when planning for your loved one with special needs „


  • Consult with trained financial, legal and tax professionals with expertise in special needs estate planning.
  • Make provisions for your grandchild(ren) with special needs. Leave money to their special needs trust. When properly drafted, a special needs trust for your grandchild will not result in the loss of government benefits.
  • Coordinate all planning with  your grandchild(ren)’s caregivers  and other relatives. Notify the caregivers when you plan for grandchild(ren). Plan with others.
  • Leave life insurance and annuity death benefits to the individual’s special needs trust. The special needs trust can be named as the policy beneficiary. When the insured or annuitant dies, the death benefit is paid to the special needs trust. The special needs trust then has a lump sum of money to be used in caring for the grandchild(ren).


  • Don’t disinherit your grandchild(ren) who have a disability. Money can be left to a properly drawn special needs trust. It does not make sense to disinherit these grandchild(ren).
  • Don’t give money to your grandchild(ren) with a disability under UGMA or UTMA (Uniform Gift or Transfer To Minors Act). Money automatically belongs to the child(ren) upon reaching legal age. Government benefits can be lost!
  • Don’t leave money to a grandchild with special needs through a will. Money left will be a countable asset of the individual – and may cause the loss of government benefits.
  • Don’t leave money to a poorly set up trust. Money left in an improperly drafted trust can result in the loss of government benefits.
  • Don’t leave money to relatives to “keep or hold” for the individual with special needs. The money can be attached to a lawsuit, divorce, liability claim or other judgment against the relative.
Due to the complexity of federal and state laws, you should confer with qualified legal and tax advisors and specially trained financial service professionals to help you plan for the future of persons your grandchild(ren) with special needs. MetLife Center for Special Needs PlanningSM. For more information about this and other related topics, visit our organization’s web site at or call 1-877-638-3375. Metropolitan Life Insurance Company, 200 Park Avenue, New York, NY 10166 L1112292122 [exp0214][All States][DC,PR]

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