Here’s the cruel math of having a special needs child: you need to save more money for their future than most parents, but the government says they can’t have more than $2,000 to their name without losing the benefits that keep them alive.
Two thousand dollars. That’s the SSI resource limit. Go one dollar over it and your child loses their Supplemental Security Income. And since Medicaid is tied to SSI, they can lose their healthcare too. For a person with profound autism — like my son — that healthcare isn’t optional. It’s survival.
So how do you save for someone who isn’t allowed to have savings?
I’ve spent years figuring this out. Here’s what I’ve learned — the tools that work, the mistakes that can destroy your child’s benefits overnight, and the things I wish every parent of a special needs child knew from day one.
The Problem: The $2,000 Cliff
If your child receives SSI, they’re subject to a resource limit. As of now, that limit is $2,000 in countable resources. Countable resources include:
- Cash
- Bank accounts in their name
- Stocks, bonds, investments in their name
- A second vehicle (one vehicle is usually exempt)
- Property other than a primary residence
What’s not counted: their primary home, one vehicle, household goods, personal belongings, and — critically — money in an ABLE account (up to $100,000) or a properly structured special needs trust.
The $2,000 limit hasn’t kept pace with inflation. It’s been the same amount for decades. It’s absurdly low, and there are ongoing efforts to raise it. But right now, it’s the number we live with.
Here’s what makes it dangerous: the limit applies to resources your child has access to, even if they didn’t put the money there. If grandma writes a $3,000 check and deposits it in a savings account with your child’s name on it, your child now has $3,000 in countable resources. Benefits gone. Grandma meant well. Doesn’t matter.
The Three Tools That Actually Work
1. ABLE Account
An ABLE account is a tax-advantaged savings account designed specifically for people with disabilities. Money in the account doesn’t count against the $2,000 SSI limit — up to $100,000.
What it’s good for:
- Accessible savings your child can actually use (some programs offer debit cards)
- Day-to-day disability-related expenses — housing, transportation, healthcare, education, daily living
- Medium-term savings goals
What to watch out for:
- Annual contribution limit of ~$18,000/year
- If the balance exceeds $100,000, SSI cash payments are suspended (not terminated — they resume when the balance drops back down). Medicaid continues regardless.
- After the beneficiary’s death, the state can reclaim funds to reimburse Medicaid costs (the Medicaid payback provision)
I put $1,000/month into my son’s ABLE account through Florida’s ABLE United program. It’s the most important savings tool I have for his near-term and medium-term future. I wrote the full breakdown in what I wish I knew before opening an ABLE account.
2. Special Needs Trust (Supplemental Needs Trust)
A special needs trust is a legal trust that holds assets for a person with disabilities without affecting their eligibility for government benefits. A trustee — not your child — manages the money and makes disbursements for things that improve your child’s quality of life.
What it’s good for:
- Long-term wealth preservation — inheritance, life insurance payouts, large gifts
- No contribution limit
- Protection from exploitation — your child doesn’t control the money, so they can’t be manipulated into giving it away
- Can be structured to pass remaining assets to other family members after the beneficiary’s death (unlike ABLE accounts)
What to watch out for:
- Requires an attorney to set up — expect to pay $2,000-$5,000 or more
- You need a trustee you trust completely, because they’ll control your child’s financial life
- Trust disbursements must be handled carefully — paying your child directly in cash can count as income and reduce SSI
The trust is the vault. It’s where inheritance goes, where life insurance proceeds go, where any large amount of money goes. It protects the money from everyone — including your child, which sounds harsh until you’ve thought about all the ways a vulnerable person can be exploited.
3. Your Own Accounts (With a Plan)
Here’s something simple that parents sometimes overlook: you can save money in your own accounts for your child’s benefit. Money in your name doesn’t count against your child’s $2,000 limit. It’s yours.
The catch: if something happens to you, that money needs to go somewhere that won’t disqualify your child from benefits. That means your will needs to direct those funds to the special needs trust — not to your child directly.
This isn’t a long-term strategy on its own, because money in your personal accounts doesn’t have the legal protections of a trust. But as a bridge — while you’re setting up the trust, or while you’re building up savings — it works. Just make sure your estate plan accounts for it.
The Mistakes That Destroy Benefits
I need to be blunt about this section because these mistakes happen constantly, they’re almost always made with good intentions, and they can take months to fix.
Mistake #1: Family Members Giving Money Directly to Your Child
Grandma wants to give your child $5,000 for their birthday. She writes a check, your child deposits it (or you deposit it in an account with their name on it). Your child now has $5,000 in countable resources. SSI is gone. Medicaid could follow.
The fix: The money goes to the ABLE account or the special needs trust. Never into a regular account in your child’s name. Every family member needs to know this. Put it in writing. Bring it up at holidays. I know it’s awkward. It’s less awkward than losing your child’s healthcare.
Mistake #2: Inheritance Left Directly to Your Child
A relative dies and leaves your child $10,000 in their will. Meant with love. The result: your child suddenly has $10,000 in assets and loses benefits until it’s spent down to under $2,000.
The fix: Every family member’s will should direct any inheritance intended for your child to the special needs trust — not to your child by name. Talk to your relatives about this. Talk to their estate attorneys. This is one of the most common ways benefits get accidentally destroyed.
Mistake #3: Joint Accounts
Opening a joint bank account with your child might seem like a practical way to manage their money. But Social Security can count the entire balance of a joint account as your child’s resource — not just their “half.”
The fix: Don’t put your child’s name on bank accounts unless it’s their ABLE account. If you need to manage money on their behalf, the trust is the right vehicle. If you’re the legal guardian, you can manage their finances through the guardianship.
Mistake #4: Paying Your Child Cash for Odd Jobs
If your child does any kind of work — even informal odd jobs for family — and gets paid in cash, that’s income. SSI has income limits too, and earning too much in a month can reduce the SSI payment or trigger a review.
The fix: This doesn’t mean your child can’t work. SSI has work incentive programs (like PASS — Plan to Achieve Self-Support, and Impairment-Related Work Expenses) that can offset some of this. But you need to report income and understand how it affects the benefit. Don’t just ignore it.
Mistake #5: Assuming the Divorce Decree Handles This
If you’re divorced — like I am — and your ex has access to accounts or might receive inheritance on your child’s behalf, make sure the financial protections are airtight. A divorce decree says who’s responsible for what, but it doesn’t automatically route money into a trust or prevent an ex-spouse from making a financial decision that affects your child’s benefits.
Get the trust language into your decree if possible. Make sure both parents understand the asset limit. This is too important to leave to assumptions.
A Checklist for Protecting Your Child’s Benefits
- Open an ABLE account. Even if you can only contribute $50/month. Get it set up now. Compare state programs at the ABLE National Resource Center.
- Set up a special needs trust. Find an attorney who specializes in special needs or disability law — not a general estate attorney. The trust structure matters enormously for benefit preservation.
- Update your will. Any money you want to leave your child must go to the trust, not to them directly. Review your beneficiary designations on life insurance, retirement accounts, and bank accounts too — these bypass your will.
- Tell your family. Every person who might ever give money to or leave money for your child needs to know about the ABLE account and the trust. Give them the account information. Put it in writing. Have the conversation even if it’s uncomfortable.
- Don’t put your child’s name on regular bank accounts. Use the ABLE account for accessible savings. Use the trust for everything else.
- Review annually. Rules change. Contribution limits change. Asset limits might eventually change. Check once a year that everything is still structured correctly.
- Keep records. Document contributions, withdrawals, and how ABLE account funds are spent. If Social Security ever audits your child’s resources, you want clean records.
The Bigger Picture
The system is not set up for our kids. A $2,000 asset limit in an era where a single medical emergency can cost ten times that is not a safety net — it’s a trap. It forces families to navigate a maze of trusts, specialized accounts, and legal structures just to save money for their own child without being punished for it.
But the tools exist. ABLE accounts and special needs trusts aren’t perfect, but they’re real, and they work. The hard part isn’t the tools themselves — it’s knowing they exist, understanding how they interact, and making sure every person in your child’s life knows the rules.
My son is 21. If he lives to 55 or 60, that’s 35 to 40 years I need to plan for — most of them without me. Every dollar I put into his ABLE account, every provision in the trust, every uncomfortable conversation with a family member about how to give him money the right way — it’s all the same thing. It’s me trying to build a bridge from now to then.
If you’re just starting to think about this, start with the ABLE account. It’s the easiest first step. Then get to a special needs attorney about the trust. Then have the family conversation.
Don’t wait. The rules don’t care if you didn’t know about them. One wrong deposit and you’re spending months getting benefits reinstated instead of building for the future.
Start today.
— Thomas