Plan ahead for disabled child who turns 18

When children turn 18, they reach a major milestone: They automatically become their own guardians, regardless of their ability to manage their lives.

If you don't apply for guardianship for your disabled child, you may not have the legal authority to make medical and other decisions. Adrienne Arkontaky, a special-needs lawyer, recommends starting the application process at least a year and a half before the child turns 18. Even if your child is only moderately disabled and can serve as his or her own guardian, you should have a health-care proxy so you can make medical decisions if your child is unable to.

The source of your child's benefits also changes at age 18, as he or she moves out of special education and into adult services. Many school systems allow disabled children to remain in their programs until age 21, but families must track down a new set of benefits after that.

Your disabled child might qualify for Supplemental Security Income from Social Security, start a job and move out of your home and into group housing (the cost of which may be covered by the state or a nonprofit organization). If your child does get a job, be aware that his or her income could reduce SSI, Medicaid and other benefits.

Amanda Sham of Bala Cynwyd, Pa., was born with microcephaly, a condition in which her skull was too small for her brain to expand properly. Now 26, Amanda graduated from a special-education program at her local high school and works as a teacher's aide in a day-care center, a job she loves and looked for herself.

As long as Amanda doesn't earn more than $900 per month in 2007, she is eligible to receive Social Security disability benefits. Although she actually earns close to $1,000, she is allowed to subtract expenses, such as the cost of getting to work, which puts her income below the cutoff. She is covered under her parents' health-insurance policy as a permanently disabled adult, and Medicaid supplements the private coverage. The Shams are glad Amanda has dual coverage because her dentist and doctor do not see Medicaid patients.

In addition to her special-needs trust, Amanda has a so-called OBRA '93 trust in which she deposits the money she earns from her job, plus birthday presents and other gifts, so she doesn't cross the asset limit for Medicaid eligibility. She can use the money for anything that benefits her health, welfare or education. When she dies, anything that remains in the trust gets paid back to Medicaid.