Special Needs Planning in Louisiana

Parents and relatives of a person with a disability face a hard question: how do you leave money to someone you love without costing them the benefits they depend on? A direct inheritance can disqualify a loved one from SSI and Medicaid overnight.

Special needs planning solves that problem with trusts, ABLE accounts, and careful coordination of every document in your plan. In Louisiana, forced heirship rules add another layer to consider.

A Louisiana estate planning attorney at Richard J. Tomeny Jr. Attorney at Law can help you protect both your loved one’s benefits and their future.

Why Government Benefits Are at Risk

Supplemental Security Income (SSI) and Medicaid are needs-based programs with strict asset limits. According to the Social Security Administration, countable resources for SSI cannot exceed $2,000 for an individual or $3,000 for a couple.

An inheritance, life insurance payout, or retirement account paid directly to your loved one can push them over that limit. They may then have to spend the money down before benefits resume, losing much of what you meant to leave them.

Special Needs Trusts

A special needs trust holds money for a person with a disability while keeping it from counting as their own resource. A trustee pays for extras that benefits do not cover, such as therapy, education, equipment, travel, and recreation.

Third-Party Special Needs Trusts

Parents, grandparents, and other relatives fund this type of trust with their own money, often through a testament or living trust. Because the beneficiary never owned the money, anything left at the beneficiary’s death can pass to other family members instead of repaying Medicaid.

First-Party Special Needs Trusts

This type of trust holds the disabled person’s own money, such as a lawsuit settlement or an inheritance that was paid directly to them. Under the SSA’s trust rules, properly drafted trusts under federal law are excluded from SSI resources.

Federal law requires these trusts to repay Medicaid from any remaining funds after the beneficiary dies. Pooled trusts run by nonprofit organizations offer a similar option for some families.

A Louisiana trust lawyer can help you choose the right type of trust and draft it to meet both federal and Louisiana requirements. Our guide to trusts in Louisiana covers the basics.

ABLE Accounts and LA ABLE

An ABLE account is a tax-advantaged savings account for a person with a disability. The person can usually control the account, which makes it a useful partner to a trust managed by someone else.

The Social Security Administration excludes up to $100,000 in an ABLE account from SSI resources. According to the Louisiana Office of Student Financial Assistance, starting January 1, 2026, people whose disability began before age 46 can qualify, up from age 26.

Total contributions are limited to $19,000 per year from all sources. Louisiana taxpayers who contribute to LA ABLE may also claim a state income tax deduction of up to $2,400 per beneficiary, or $4,800 on a joint return.

Forced Heirship and Special Needs Planning

Under Louisiana Civil Code article 1493, a child of any age who is permanently unable to care for themselves or manage their estate because of a mental or physical condition is a forced heir. That child is entitled to a reserved share of your estate.

Leaving that share outright could cost your child their benefits. Louisiana allows a forced heir’s share to be placed in trust, so a properly drafted special needs trust can satisfy the law while protecting eligibility.

Your beneficiary designations should point to the trust too, rather than to your child directly.

The Letter of Intent

A letter of intent is a personal guide for future caregivers and trustees. It describes your loved one’s routines, medical needs, doctors, likes, dislikes, and your hopes for their future.

The letter is not legally binding, but it is often one of the most valuable documents a family leaves behind. Update it whenever your loved one’s needs change.

If your child is a minor, also name a tutor, as explained in our guide to guardianship for minor children. Adult children may need a separate plan for decision-making support, and a Louisiana elder law attorney can help coordinate care and benefits across a lifetime.

Protect Your Loved One’s Future

Attorney Richard J. Tomeny Jr. has practiced law in Louisiana for more than 48 years. He drafts testaments and trusts that provide for a loved one with a disability while respecting Louisiana’s forced heirship rules.

Families balancing benefits and long-term care can also work with a Louisiana Medicaid lawyer or a Louisiana elder care lawyer at our firm. Contact our office in Baton Rouge at (225) 334-8080 or in Metairie at (504) 535-7350 to schedule a free consultation.

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