Florida Estate Planning for Parents of Special Needs Children With $1–$15 Million in Assets
- Randy Narkir, Esq.
- 2 days ago
- 7 min read
Florida families raising children with special needs face estate planning decisions that are fundamentally different from those of other high-asset households.
When a family has between $1 and $15 million in assets, the greatest risk is usually not estate taxes. It is unintentionally disqualifying a child from Medicaid, Medicaid Waiver and Supplemental Security Income (SSI), programs that often provide lifelong medical care, therapy services, and residential support.
Under current Florida and federal rules, a disabled adult generally cannot own more than $2,000 in countable assets without losing Medicaid and SSI eligibility. For families with significant wealth, this creates a critical distinction between what the family owns and what the child is legally allowed to own.
This article explains how Florida estate planning works for special needs families in this asset range, where mistakes most often occur, and how planning strategies must evolve as wealth increases.
Why Florida Estate Planning Is Different for Special Needs Families
Parents of children with disabilities must solve two legal problems at the same time.
First, they must fund lifelong care and support. Second, they must preserve eligibility for needs-based benefits with strict financial limits.
In Florida, Medicaid eligibility for a disabled adult generally requires countable assets below $2,000, with limited exemptions such as a primary residence, one vehicle, and prepaid burial arrangements. SSI follows similar resource limits, with federal benefit payments currently around $967 per month for an individual.
Florida law allows families to preserve these benefits, but only when assets are structured correctly. Direct ownership, outright inheritances, and poorly drafted trusts routinely cause loss of benefits, even when families believe they have planned carefully.
Florida families must also plan for who will make medical, financial, and personal decisions for their child when they reach adulthood. Depending on the disability, this may involve guardianship under Chapter 744 or guardian advocacy under section 393.12 of the Florida Statutes.
This combination of benefit rules and decision-making requirements makes special needs estate planning a distinct legal discipline, not an extension of a standard estate plan.
How the $1–$15 Million Asset Range Changes Planning Strategy
Families with assets between one and fifteen million dollars fall into a unique planning category.
Most are below the 2025 federal estate tax exemption of $13.99 million per individual, and Florida does not impose a state estate tax. As a result, tax minimization is often not the primary driver of planning decisions.
Instead, the focus shifts to asset control, benefit preservation, and long-term administration.
For most families in this range, the foundation of the plan is a third-party special needs trust, funded with parental assets. Unlike first-party trusts, third-party trusts do not require Medicaid payback at the beneficiary’s death and allow parents to control how funds are used and where remaining assets pass.
As assets increase, families often add professional trustees, diversified investment strategies, and lifetime gifting plans. For example, the 2025 annual federal gift tax exclusion of $19,000 per recipient allows families to gradually move assets into protected structures while maintaining flexibility.
Because benefit rules and tax laws change, these plans should be reviewed regularly.
Florida Homestead Rules and Special Needs Planning
Florida homestead law is one of the most powerful, and most misunderstood, planning tools available to special needs families.
Under the Florida Constitution, a primary residence is generally protected from creditors and is not counted as a Medicaid asset if the beneficiary intends to return home. In some Medicaid contexts, home equity limits around $730,000 may apply.
However, Florida homestead law also places strict rules on how property can be transferred at death.
For families with adult children with special needs, homestead planning often involves enhanced life estate deeds or coordinated trust strategies to avoid probate and prevent the residence from becoming a countable asset.
When structured correctly, homestead planning preserves housing stability. When handled incorrectly, it can delay administration or disrupt benefit eligibility.
Medicaid Eligibility Rules Florida Parents Must Understand
Florida Medicaid remains the backbone of long-term care and support services for disabled adults.
In most programs, a disabled individual must keep countable assets below $2,000. Income limits vary by program and waiver but typically range between $1,149 and $1,552 per month, depending on eligibility category.
Certain assets are exempt, including a primary residence, one vehicle, and prepaid burial arrangements. Florida Medicaid also allows limited spend-down strategies, but only for permitted expenses.
For families with significant wealth, the key issue is not how much money exists, but who legally owns it.
SSI Eligibility and the Risk of Direct Ownership
SSI eligibility rules are strict and unforgiving.
An individual generally cannot have more than $2,000 in countable resources or receive income above federal limits without losing benefits. For minors, parental income is deemed to the child until age eighteen.
Properly drafted special needs trusts prevent trust assets from being treated as countable resources. Improperly drafted trusts do not.
This distinction is why generic trust templates and do-it-yourself planning often fail special needs families.
What Happens When an Inheritance Is Structured Incorrectly
Leaving assets directly to a child with special needs is one of the most damaging mistakes families make.
A direct inheritance can immediately disqualify a beneficiary from Medicaid and SSI, triggering penalty periods and forcing the family to privately fund care until eligibility can be restored. In some cases, benefits are never fully reinstated.
Florida probate further complicates matters by delaying access to funds and making personal financial information public.
Once benefits are lost, repairing the damage is far more expensive than planning correctly from the beginning.
Special Needs Trusts in Florida: What Actually Works
Florida special needs trusts must comply with 42 U.S.C. § 1396p(d)(4) and Chapter 736 of the Florida Statutes, among other federal and state laws.
Their purpose is to supplement government benefits, not replace them.
A first-party special needs trust is funded with the beneficiary’s own assets and requires Medicaid payback at death.
A third-party special needs trust is funded with assets belonging to parents or other third parties and does not require Medicaid payback. For families with $1–$15 million in assets, third-party trusts are typically the cornerstone of an effective plan.
Tax Considerations for Florida Families Under $15 Million
Florida does not impose a state estate tax.
At the federal level, the 2026 estate tax exemption of $15 million per individual and $30 million per married couple covers many families in this asset range. However, scheduled changes make forward-looking planning important.
Irrevocable third-party special needs trusts are generally excluded from the taxable estate. Revocable trusts are not.
Revocable vs Irrevocable Trusts in Special Needs Planning
Revocable trusts offer flexibility and control during life, but they do not protect assets from Medicaid or SSI calculations. They can become irrevocable later.
Irrevocable trusts, when properly drafted, can sometimes protect assets and preserve benefit eligibility, but limit future changes.
Most effective special needs plans consider the use of both or using both, assigning each a specific role rather than relying on one structure alone. The key is that each option has strengths and limitations, and the right choice depends entirely on your family’s situation.
Guardianship and Decision-Making After Age 18
When a child with special needs turns eighteen, parents lose automatic legal authority.
Florida law requires a court determination of incapacity for guardianship under Chapter 744. For individuals with qualifying developmental disabilities that began before age eighteen, guardian advocacy under section 393.12 may be available as a less restrictive alternative.
Florida continues to distinguish between Chapter 744 Guardianship (which requires a court to declare a person "incapacitated") and Section 393.12 Guardian Advocacy. For families of children with developmental disabilities (such as Autism, Down Syndrome, or Cerebral Palsy), Guardian Advocacy remains the "lighter," less intrusive legal path to maintaining decision-making authority after age 18.
Failing to plan for this transition often creates legal and medical complications at a critical time.
Common Estate Planning Mistakes Florida Families Make
Even affluent families make costly mistakes.
Common issues include naming a child directly on beneficiary forms, relying on generic trust documents, failing to update plans as benefit rules change, and overlooking the need for professional trustees when assets become complex.
These mistakes are rarely intentional. They happen because special needs planning requires regular maintenance and precision.
Frequently Asked Questions About Florida Special Needs Estate Planning
Even affluent families make costly mistakes.
Can my child with special needs inherit money without losing Medicaid or SSI in Florida?
Yes, but only if the inheritance is structured correctly. In Florida, a disabled adult generally cannot own more than $2,000 in countable assets without losing Medicaid and SSI eligibility. Inheritances are typically directed into a third-party special needs trust, not given outright.
How much money can a special needs beneficiary have and still qualify for Medicaid in Florida?
Most Florida Medicaid programs limit a disabled individual to $2,000 in countable assets. Income limits usually range between $1,182 and $1,552 per month, depending on the program. Certain assets such as a primary residence and one vehicle are exempt.
What is the difference between a first-party and third-party special needs trust?
First-party trusts are funded with the beneficiary’s own assets and require Medicaid payback at death. Third-party trusts are funded with assets belonging to parents or others and do not require payback. Third-party trusts are typically preferred for higher-asset families.
Does Florida have an estate tax?
No. Florida does not impose a state estate tax. The 2025 federal estate tax exemption is $15 million per individual and $30 million per married couple.
Do parents need guardianship when a child with special needs turns 18?
Parents lose automatic authority at age eighteen. Depending on the disability, Florida law may require guardianship or allow guardian advocacy for qualifying developmental disabilities.
Talk With a Florida Special Needs Planning Attorney
Every family’s situation is different, and in special needs planning, small details have lifelong consequences.
If you want clarity on how Florida law applies to your assets, your child’s benefits, and your long-term goals, a focused planning conversation can help you understand what needs attention and what is already working.
You can reach out to our team to review your current plan or begin building one designed specifically to protect your child and preserve eligibility over the long term.
Disclaimer
This article provides general educational information only and does not constitute medical or legal advice. Parents and caregivers should consult qualified healthcare providers regarding medical decisions and licensed attorneys regarding estate planning, special needs trusts, and public benefit eligibility. Information presented reflects research available as of early 2026 and may not account for subsequent developments in law, policy, or medical evidence.
References and Legal Sources
42 U.S.C. § 1396p(d)(4), Special Needs Trust provisions
Chapter 736, Florida Statutes, Florida Trust Code
Chapter 744, Florida Statutes, Guardianship
Section 393.12, Florida Statutes, Guardian Advocacy
Florida Constitution, Article X, Section 4, Homestead Protection
Florida Agency for Health Care Administration, Medicaid eligibility guidelines
Social Security Administration, SSI resource and income limits
Internal Revenue Service, federal estate and gift tax exemptions
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