Special needs planning
The question every parent asks: what happens when we are gone?
We help families plan money for a loved one who will need support for life, planned to help preserve benefits eligibility in coordination with your attorney, and we manage the investments for the trust your attorney sets up. Special needs planning is a large part of what we do.
The basics
What a special needs trust does
A special needs trust holds money for a person with a disability without that money being counted as theirs when they apply for means-tested benefits such as Supplemental Security Income and Medicaid. Set up and run correctly, it pays for what improves their life, beyond what those benefits cover, while the benefits continue.
- A third-party trust
- Funded by parents, grandparents or others with their own money, often through an estate plan or life insurance. It is the usual way families provide for a loved one’s future.
- A first-party trust
- Funded with the beneficiary’s own money, such as an inheritance or a legal settlement. It generally has to repay the state for Medicaid care when the beneficiary dies.
- The trustee
- The person or institution that manages the trust and decides on payments. Trustees have legal duties to invest prudently and to keep records, and many hire an investment adviser to manage the money.
Which kind of trust you need, and how it is written, is a legal decision for your attorney. We explain how the pieces fit; we do not give legal or tax advice.
Benefits and ABLE accounts
Protecting eligibility, year after year
- Benefits first
- Investments and withdrawals planned around eligibility rules, so a good year in the markets does not put support at risk.
- ABLE accounts
- Tax-advantaged savings accounts for people whose disability began before a qualifying age. They can work alongside a trust for day-to-day spending; your attorney can confirm what suits your family.
- Siblings and trustees
- A written plan the next generation can actually follow, with the people and the money named.
- Reviewed as life changes
- School, work, housing, care. The plan moves with them, and we meet whenever it needs to.
Working together
Alongside your attorney, not instead of them
- Your attorney drafts the trust and the estate plan, and advises on the legal structure.
- The trustee holds the account and decides on payments, within the trust’s terms.
- We manage the investments for the trustee, at Charles Schwab, in the trust’s name, and plan cash for expected payments ahead of time, rather than selling in a hurry.
Lela Kelly, our general counsel, brings 16 years of corporate law, including work on estate planning, trusts and special needs matters, so the conversation with your attorney starts in the same language. Your family’s own attorney still sets up the legal structure.
Why our portfolio suits these accounts
Built for money that has to last
Alpha Convergence, the strategy we manage for families and institutions alike, has the qualities a trustee looks for when investing for someone who depends on the money.
- Diversified. 22 companies, the same amount in each, across all eleven parts of the economy.
- Liquid. Large, widely traded companies, so cash can be raised for payments when the plan calls for it.
- Alpha Convergence: no derivatives, no margin. Long only: the account owns shares outright and never borrows.
- No lock-up. Daily liquidity, and a 30-day agreement the trustee can end at any time.
- Held at Schwab. In the trust’s name. We never take custody of the money.
- Built with the trustee’s duties in mind. Designed to sit within the prudent-investor standard trustees must meet.
Most gains are short-term, which matters in a taxable trust; we talk that through with you and your adviser before you invest. Investing involves risk, including possible loss of principal.
Before you decide