“Test Driving” the Special Needs Succession Plan – Best Practices for Professionals

A nationwide trend has been observed by special needs trust administrators and bank trustees, indicating a substantial impending transfer of wealth from the aging "baby boomer" generation to their adult children with special needs, via third-party special needs trusts.

The conventional recommendation regarding Special Needs Trust funding and engaging the services of vendors to serve as trustee and conservator until the death or incapacitation of parents is being challenged. Recently, parents have requested services from Fiduciaries, Conservators, Trustees, Financial Planners, Attorneys, and Case Managers to implement their successor special needs plan while the parents are still living and healthy enough to support the transition process, while also evaluating their chosen vendors. Many professionals working with families during this process recommend several best practices in planning for their loved one’s future, including;

1. Defining the vision for quality of life within the scope of available resources – private family funding, third party benefits, role of next generation family members – documentation of the comprehensive plan for all disciplines – care, financial, legal.
2. Financial planning considerations and tools – Investments, tax planning, life insurance, etc.
3. Attorney collaboration and estate planning documentation – trusts, powers of attorney, end-of-life directives
4. Considerations in “successor” designations – avoiding the “surprises"

While these best practices remain essential, professionals should also consider recommendations and support for families who wish to initiate the transition plan earlier than previously thought possible.

Development of the life transition plan – timing and delegation

A thoughtful transition from parent-led care to successor decision-makers starts with clear delegation. The most impactful areas of delegation often involve quality-of-life decisions, including housing, transportation, personal care, nutrition, socialization, employment supports, vacations, and daily financial management. Medical decision-making must also be clearly assigned, covering provider selection, ongoing care coordination, and prescription management. Additionally, benefits management requires thorough consideration, as public benefits depend on accurate reporting, consistent oversight, and informed financial decisions.

Families must decide when to partially or fully fund special needs trusts and ABLE accounts. Clear authority over representative payee and checking accounts, along with management of credit cards and monitored spending tools like True Link cards, is also crucial.

Finally, establishing a team of trusted professionals which could include a tax accountant, attorney, financial planner, benefits specialist and professional case manager, creates a team with clear and defined roles and responsibilities, allowing caregiving family members to step back while preserving stability and quality of life.

As professionals work through this transition process with their clients, several essential considerations must be reviewed collaboratively with the client and their legal, financial and care management teams.

1. Assessment of adequate funding availability to meet parent/client expectations
2. Defined control for decisions for distributions of funds
3. Legal authority and responsibilities
4. Pricing for professional time
5. Dispute resolution with the parents
6. Communication expectations
7. Quality Assurance
8. Practice Risk

A “Real Life” Case

Mr. and Mrs. Smith, both in their mid-80s, found themselves at this crossroads. They had spent decades building a stable, loving, and highly structured life for their youngest daughter, Jenny, who is 45 and has special needs. While Jenny is healthy, employed part-time, and living independently in her own apartment, nearly every aspect of her life has long been managed by her parents.

Jenny has numerous benefits in place including Section 8 Vouchers, SNAP, Social Security Dependent Adult Child (DAC), Medicare, MediCal, IHSS, and Independent Living Services. She has supportive services vendors that are paid privately by her parents and also through IHSS and Regional Center.

Mr. and Mrs. Smith have an estate plan that establishes a Third Party Special Needs Trust for Jenny’s sole benefit. They have established an ABLE account, maintained multiple bank accounts, and provided tools such as a credit card and a monitored spending card. They worked closely with an experienced special needs attorney, a professional case manager, and a trusted financial planner. The plan was thorough and well-structured on paper. In practice, however, Mr. and Mrs. Smith were doing almost everything themselves. They managed Jenny’s housing, employment, finances, transportation, medical care, nutrition, benefits, social life, vacations, and the supervision and payroll of multiple caregivers and vendors. As they aged, the weight of these responsibilities became exhausting. Their concerns shifted from “Have we planned enough?” to “Who will do all of this, and how do we ensure that they do it well?” They wanted the freedom to travel and enjoy their retirement years without constant worry about Jenny’s care.

Mr. and Mrs. Smith asked their attorney and financial planner for recommendations regarding taking their special needs plan for Jenny on a “test drive”.  They were referred to National Care Advisors for special needs case management and consulting services.

The early phase focused on collaboration and intentional delegation. The Smiths identified which responsibilities they were ready to hand off and which they wanted to retain for now. A search began for professional fiduciaries who were willing to accept this family as clients without being named as Trustee initially. Expectations around communication, boundaries, and quality assurance were clarified. The process also required emotional support, as relinquishing control after decades of hands-on caregiving was not easy. At the same time, conversations expanded to include the Smiths’ own future eldercare needs and the role Jenny’s siblings might play in supporting her long-term.

Three years into the transition, meaningful progress has been made. A fiduciary was eventually located that was the right fit for the family, accepting a more limited role in managing the partially funded trust account. Jenny’s finances were simplified, with fewer bank accounts and shared management with the fiduciary.

A professional special needs case manager now oversees all benefits management and monthly reporting, collaborating closely with the fiduciary and the fiduciary’s care manager. While Mr. and Mrs. Smith still handle private caregiver payroll, the fiduciary’s care manager conducts weekly visits, monitors vendor performance, coordinates services through IHSS and the Regional Center, ensuring that Jenny is safe and has an optimum quality of life. A crucial family meeting brought Jenny’s siblings into the conversation, aligning everyone around a shared vision for the future. Perhaps one of the clearest examples of how the thorough redefining of this transition process has been effective is that Mr. and Mrs. Smith were able to take a month-long vacation to Europe, free of stress and constant worry. Jenny remained safe, supported, and engaged, and her parents were able to step back without fear.

This case highlights several important lessons. There is no one-size-fits-all solution in special needs planning. Families evolve, and plans must evolve with them. Professionals working in this space must be willing to listen, adapt, and acknowledge the real risks involved. Increasingly, parents will want to test drive their plans alongside their successor decision-makers while they are still able to participate. When done thoughtfully, this gradual transition can provide peace of mind for family members and a more sustainable future for their loved one.

Let us help you plan for the future. Contact National Care Advisors to learn more about how our expert Nurse Consultants can help you, your client or your family develop a thorough Special Needs Succession Plan.