What happens when your child with special needs turns 18? A Parent’s Guide to the Transition to Adulthood

Turning 18 isn't just a birthday.

For most families, the day your special needs child turns 18 marks one of the biggest transitions of your child's life. Overnight, the law begins treating your son or daughter as an independent adult—even if they still rely on you for everyday decisions and support.

At the same time, a surprising number of opportunities also open up. Government benefits may become available for the first time. New financial planning strategies become possible. Adult educational and vocational programs begin to replace school-based services.

The transition can feel overwhelming, but it doesn't have to happen all at once. Thinking about it in a few key areas can help you prepare with confidence.

Figure 1. Six major areas of life change when a child with disabilities reaches adulthood. The remainder of this article explores each one in more detail.

 

Legal authority changes

Before 18, parents have the authority to make decisions for their children.  At age 18, however, that is no longer automatically the case.  Without intervention or preparation, courts will recognize your child as an adult at that age—meaning they have the right to act for themselves.  Many people with special needs, however, do not have the capacity to make safe and appropriate decisions without help.  If that is the case for your child, you need to create new legal authority to be able to intervene on their behalf. 

There are several options, and family courts are likely to choose the one that is the “least restrictive” —or the one that retains as many of their rights as is appropriate based on their capacity.  That generally requires that the individual, parents, medical or therapeutic providers, advocates, teachers, or whoever else may add valuable information present that to the court for a judge to be able to make the best decision.

Here are some possible outcomes (availability and nomenclature varies by the state):

• Guardianship/Conservatorship: This is the most restrictive designation and essentially removes the decision-making rights from the individual to whoever is designated to take on these roles (usually the parents initially).  It is reserved for those individuals who lack capacity to make appropriate decisions on their own.  A guardian is in charge of those things related to the individual’s quality of life and might include supervision, medical care, therapies, daily activities and housing situations.  A conservator manages their financial life and assets.  Many states lump these together in a single designation, if appropriate, but they can be assumed by different people.     

• Power of attorney (POA):  This requires the individual to have capacity to make their own decisions.  They are merely ceding some of that authority to another individual to act on their behalf.  The authority given by a POA should be defined ahead of time and can be removed by the individual at any time as well.  You can create limited POAs for specific aspects of their care.

• Supported decision-making (SDM): Unlike the other two designations, SDM is not legally binding.  Instead, it is a framework where an individual with special needs appoints another person to help them make decisions.  That individual is listed as a “Supporter” and in the states where it is recognized, allows them access to certain private information like medical records and bank accounts, for example, in order to help the individual make appropriate decisions.

  
  

For more information about legal authority, I’ll refer you to another recent article: Guardianship, Power of Attorney, or Supported Decision Making? Which is right for your adult child with special needs?

Government benefits change 

Until they turn age 18, most families are not eligible for government assistance in the form of SSI or Medicaid.  That is because these benefits are means-tested, which means that you are not eligible if your assets or income exceed a certain limit.  Before 18, parents’ assets are counted as the child’s assets and given the extremely low limits, few families qualify.  Some states are more flexible with these rules and provide financial assistance and healthcare to younger children depending on their condition.  But if your family does not qualify for help while your child is young, that all could change at age 18.  This is when your child is considered an adult and deemed able to care for themselves and manage their own finances.  Thus, their personal assets are now what is counted—no longer the family’s. 

Qualifying for and obtaining these benefits is important for many reasons. 

First, although SSI income checks are not large, they can help with basic support and act as a safety net to help pay for things like food, clothing and shelter. 

Second, Medicaid provides basic health care coverage and keeps them from falling through the cracks in our healthcare system.

Third, Medicaid also pays for state-dependent waiver programs that provide extra assistance that is often critical to maintain a good quality of life, not only for the individual but for the family as well.  This includes day programs, respite care, transportation, food assistance, housing assistance, and vocational training. 

Individuals become eligible for these government benefits on the day after they turn 18.  The application process can take several months or longer to complete but is retroactive to the date that they apply if they qualify.  So, the sooner that you do it the better. 

Qualification is based on functional ability, not necessarily diagnoses.  It is important that you can demonstrate how their disability impairs their ability to function as a “normal” adult in society without assistance.  The more evidence that you can provide from therapists, teachers and medical providers, the more likely that your child will qualify.  If you are denied the first time, however, it may be worth meeting with a special needs attorney or advocate to review your case.  Many are won on appeal. 

If your child is awarded SSI, it will require you to designate a Representative Payee (RP).  That is the person responsible for receiving the government benefit check and then distributing it or using it on behalf of the individual with special needs.  The RP has a fiduciary responsibility as well as reporting requirements to the government for using that money appropriately.

For more information about the type of government benefits available, read:

A Beginner’s Guide to Government Benefits for Individuals with Special Needs.

Financial ownership and money management change

In order to qualify for some government benefits, individuals must avoid having all but minimal assets in their own name.  That includes bank accounts, real estate or other property, investment accounts, 529 accounts, custodial accounts, etc. So, given these restrictions, how can we save for their futures?  Government support is a safety net but is not likely to provide for all of the additional things that you wish them to have to maintain the quality of life that you envision for them—for their entire lives, not just yours.

That is where special needs trusts and ABLE accounts come in.  These accounts allow you to save for their supplemental support while not counting as assets that would make them ineligible for means-tested benefits. 

If you have conservatorship, you are tasked with managing their financial life.  Even without that designation, you can create a third-party special needs trust and donate on their behalf.  You can also manage an ABLE account for them. 

Special Needs Trust are managed by a trustee that is different from the beneficiary of the assets. Many parents function as the trustees while they are alive, but you will need to designate successor trustees for when you are no longer available.  Often, it makes sense to choose a corporate trustee to manage these funds with their ever-changing rules and tax implications.  Even with a corporate trustee, family members can act as co-trustees, advocates, or trust-protectors.

For more information about managing these accounts and how money flows to your child, read these articles:

Funding Your Special Needs Plan:  How the Money Flows

Special Needs Trusts Explained:  What Every Parent Should Know

Healthcare changes 

At age 18, without other legal safeguards in place, parents no longer have the right to make medical decisions for their children.  They are now considered adults, and as such, are protected by HIPAA and other privacy laws.  They have the right to make all of their own medical decisions.  Parents cannot even be involved without the consent of the individual.  Again, this is another opportunity to emphasize how important it is to establish the appropriate level of legal authority for your child so that you can help them if they are unable to understand and make the right choices for themselves. 

School and transition services changes 

Most children graduate from the public school system at or around age 18.  Under IDEA law, if your child is on an individualized education plan (IEP), they continue to receive service from the school district until the age of 21 or 22, depending on the state.  This is usually called a transition program and is different than a regular school classroom. For most, transition programs focus more on life skills and job development rather than traditional education classes.  It is a good time to learn how to engage with the community and see what opportunities are out there for them after they age out of the system. 

The support system changes 

Before age 22, most of the educational and therapeutic support is provided by the school district.  As an adult, however, the school district is no longer involved.  Unless you find an alternative way for them to spend their days, this can create a big hole in their growth. 

Thankfully, most states have created programs for adults that help them to continue to fill their time with something meaningful and to interact with peers.  These include day programs where individuals with special needs get together and engage in a variety of activities ranging from recreational activities, volunteer work, crafts, exercise classes, job skill training, or just fun social events.  These are supervised by program directors and staff.  Medicaid waivers also pay for  respite programs for other family members when needed.

Without state assistance, these programs would be cost-prohibitive for most families.  Fortunately, most states use part of their state Medicaid budget to provide these services for people.  These are called Medicaid waivers. Since they are not part of the federal-supported Medicaid program, each state must invest in these programs, and as you would imagine, there is a lot of variability from state to state. 

Medicaid helps to support qualifying people with disabilities with food assistance and housing support.  Housing options vary from supported living with a family member to independent supported living communities to  host homes to group homes.  Most states have moved away from large institutional housing solutions to more family- or community-oriented ones.  Deciding on the timing of a move away from the parents’ home into another setting is going to be very individualized. But since many of those other solutions have often decades-long waiting lists, it is good to get on them as soon as possible and then decline later if it is not the right fit.

For those individuals who are interested in getting a job, there is another government-supported program called Vocational Rehabilitation.  Participants in this program would receive a skill assessment, job training, on-the-job support, and even funding for advanced degrees or certification if qualified. 

A Checklist for Parents

Although all of these changes officially occur at age 18, the planning should begin much earlier. Many families start at least six to twelve months beforehand so there is time to gather records, explore legal options, and submit benefit applications promptly after their child's birthday. Some of the financial asset protection may need to start years before that even.

Here is a summary checklist of things to do:

1.      Prepare documentation about the level of your child’s disability to present when applying for SSI.  Gather outside evaluations from doctors, teachers, and therapeutic providers. Be prepared to apply immediately after their 18^th birthday.

2.      Decide on the likely best level of legal authority and contact the family court in your jurisdiction to learn the process.

3.      Be sure that they have no assets labeled in their name.  Move any assets to an ABLE account or Special Needs Trust.

4.      Establish a healthcare Power of Attorney.  Normally if you obtain guardianship, you are allowed to automatically act in that role. 

5.      Contact the local community resources who oversee Medicaid waiver programs to see what is available and what they would be eligible for.  In most states, you will be assigned a case worker who can help you navigate your options.

6.      Start thinking in advance what you want your child’s life to look like when you are no longer able to care for them.  Begin envisioning what team members would need to be involved.  The sooner that you build a support team, the smoother the transition will be.

I can speak from experience when I say that although some days seem to last forever when you are a parent of a special needs child, the years and decades fly by.  As the parent of two adult sons with disabilities, I know firsthand how emotional this transition can be. Some of these decisions felt overwhelming when we faced them ourselves. Some we did a good job with.  Others took us more time to figure out. 

Today, as a special needs planner, one of my goals is to help other families navigate this transition with more confidence and fewer surprises than we experienced.

Planning for the future takes on an entirely different meaning when you have to consider what will happen to your adult child after you're gone. None of us can predict the future, but thoughtful planning gives our children the best chance to thrive long after we're no longer there to make every decision.

If you'd like help understanding how all of these pieces fit together into a cohesive plan—with downloadable worksheets and practical tools to help you build your own—I invite you to explore my online course, The Financial Clarity Blueprint for Special Needs Families.

Disclaimer: the material in this blog post is intended for general educational purposes only and should not be considered specific financial advice. You should always consult with your personal financial advisor to see how it might fit within your personalized financial plan.