Eileen Carrero photo

Eileen M. Carrero, CPA

Financial Advisor, CPA


Eileen Carrero Financial Services, LLC

Wealth Management, Tax & Accounting

4917 West 144th Place

Midlothian, IL 60445


Phone:  708-489-1035

Fax:      708-489-1036


Email: eileen.carrero@ceterafs.com

Website: www.myecfs.com

March/April 2024

Caring for a Special-Needs Loved One

Volunteers helping disabled people. Group of men and women with special needs, on wheelchair, with prosthesis. Vector illustration for support, diversity, disability, lifestyle concept

Providing for a special needs child, minor or adult, can be daunting. To safeguard your child’s future well-being, work with your financial and legal professionals to help ensure you have a sound strategy in place.

A Basic Protection Structure
After security for the child, the primary point of special-needs planning is protecting the child’s eligibility for government benefits. The way to do that is to limit the amount of assets in the child’s name to $2,000 or less.

Consider distribution events that could push the child’s assets over that amount. For example, make sure your beneficiary designations don’t name your spouse as primary and all children equally as contingent beneficiaries. If your child doesn’t require guardianship, have your attorney draft a financial power of attorney and health care proxy. A will may be needed, as well.

If you don’t have a special-needs trust, talk with a legal professional about creating one for the child’s inheritance. These trusts may be created with life insurance proceeds and effectively let you leave the child as much money as you want without disqualifying them for government benefits.

Available Tax Breaks
Consider income-tax breaks that may let you do more for your child. If you have someone care for your child while you work, you may be able to claim a child and dependent tax credit equal to a percentage (most likely 20%) of up to $3,000 ($6,000 if you have more than one qualifying dependent) of your expenses.

If your medical expenses and those paid for your special needs dependent exceed 7.5% of your taxable income, you may be able to deduct more than the costs of your child’s doctor visits and testing. Modifications made to your home to accommodate the child’s disability, for example, may qualify. Of course, everyone’s financial and tax situations are different. Be sure to consult your tax professional before taking action.

A special needs trust that’s properly funded with life insurance benefits can provide lifelong support for a loved one’s special needs without jeopardizing government assistance such as Supplemental Security Income or Medicaid.


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