Estate Planning — Israel
Will for a Child with Special Needs in Israel
Planning for a Lifetime of Care
Leaving assets to a child with a disability requires more than a standard will. Adv. Liron Elmaliach advises parents on trusts, guardianship, and structuring an inheritance that protects both your child and their state benefits.
The Challenge of Leaving Assets to a Child with Special Needs
Every parent fears the same q: what will happen to my child after I am gone? For parents of a child with a disability, this question carries an added layer of urgency and complexity. A standard will that transfers assets directly to a child with special needs can, paradoxically, cause serious harm.
The most pressing concern is the impact on state benefits. Many NII (National Insurance Institute) disability benefits — particularly the income-supplement component of the disability pension — are means-tested. A direct inheritance that places significant assets in your child's name can reduce or eliminate those benefits, leaving them worse off financially than before the inheritance.
A second challenge is capacity. A minor child cannot legally own or manage significant assets, and an adult child with a cognitive or psychiatric disability may not have the practical ability to manage a substantial inheritance safely — even if they retain formal legal capacity. Without a plan, assets can be mismanaged, consumed, or lost entirely.
The solution that Israeli law provides is the trust. A carefully drafted discretionary trust, built into the will, allows you to leave assets for your child's benefit without those assets passing into their personal ownership — preserving eligibility for state support while ensuring the funds are used for their care and quality of life, under professional supervision, for as long as needed.
Trust for a Special Needs Beneficiary — How It Works in Israel
A special needs trust is established within the will itself. Upon the testator's death, the designated assets pass not to the child directly but to a trustee, who holds them under the terms of the trust deed. The trustee manages the assets and makes distributions for approved purposes — supplemental care, equipment, therapies, recreation, and travel — without the funds ever appearing as the beneficiary's personal property.
Choosing a trustee is one of the most important decisions in this process. A family member — typically a sibling of the child with special needs — brings personal knowledge and genuine commitment. A professional institution (a licensed trust company or law firm) brings financial expertise, neutrality, and the assurance of continuity. Many families appoint a sibling as primary trustee and a professional institution as successor trustee, combining the advantages of both.
What the trust document specifies includes: the assets to be held in trust; the purposes for which the trustee may spend funds; any restrictions or priorities; the trustee's fee and reporting obligations; what happens if the trustee dies or becomes incapacitated; and what happens to remaining assets upon the beneficiary's death. It may also include a non-binding letter of intent expressing your wishes, values, and knowledge about your child — a deeply personal guide for the trustee.
Coordination with guardianship and POA is essential. The trust governs assets, but it does not determine who makes personal and medical decisions for your child. If your child lacks legal capacity, a guardian may need to be appointed by the court. If they retain capacity, a Continuing Power of Attorney can be prepared — ideally before the parent loses capacity themselves. Adv. Liron Elmaliach addresses all of these elements together, ensuring the legal framework for your child's future is coherent and complete.
Financial planning for lifetime care requires a realistic assessment of expected costs. Together with financial advisers where appropriate, Adv. Liron Elmaliach helps parents think through the likely scale of care needs, the expected duration of the trust, and how to structure the assets — whether held as cash, investments, or real property — to maximise the funds available to your child over their lifetime.
Frequently Asked Questions — Will for a Child with Special Needs
Everything you need to know about planning an inheritance for a child with a disability in Israel
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