Special Needs Trusts

A Special Needs Trust is designed to protect an individual who is receiving benefits from state or federal government from losing eligibility for those benefits.

For many parents, a Special Needs Trust is the most effective way to help their child with a disability. If you have a child or other family member who receives SSI, and/or medical coverage through the Medicaid Waiver program, the last thing you want to see happen is for your child to lose their benefits because they have received or will receive assets by gift or inheritance. A Special Needs Trust is used to manage such resources while also maintaining the child’s eligibility for public assistance benefits.

A Special Needs Trust can also safeguard your family member’s assets from anyone who might mismanage their funds and can be set up either with or without a Conservator being appointed.

There are several varieties of Special Needs Trusts. Some are created with the beneficiary’s money (self-settled) and some are created with someone else’s money (third-party). As the name implies, a “Special Needs Trust” or “Supplemental Care Trust” is designed not to provide basic support, but instead to “supplement” someone’s care or pay for other comforts and luxuries that would either be inappropriate or would cost more than the individuals benefits could afford. These trusts typically pay for things like education, recreation, counseling, and medical attention which is not covered by insurance and other things beyond the simple necessities of life.

A Special Needs Trust (also known as “Supplemental Care Trust”) can be used for a variety of items, such as:

  • Medical and dental treatment and equipment not covered otherwise
  • Rehabilitative expenses and occupational therapy services
  • Extra nursing care
  • Special dietary needs
  • Eyeglasses
  • Books, training or other educational materials or programs
  • Companion or caretaker expenses
  • Private case management
  • Trips to museums, movies, shopping, or to visit other family
  • Expenses associated with bringing relatives or friends to visit with the beneficiary
  • Vacations for the individual and a caretaker
  • Telephone service and answering machines
  • Cable TV or movie rental
  • Purchase of a computer, TV, radio, stereo or musical instruments for the beneficiary
  • Purchase of furniture for the beneficiary
  • Purchase of an automobile, if necessary for transportation to medical treatment
  • Cost of making a house accessible
  • Cost of modifying a vehicle to meet the needs of the beneficiary

Often, special needs trusts are created by a parent or other family member for a child with special needs (even though the child may be an adult by the time the trust is created or funded). Such trusts also may be set up in a will as a way for an individual to leave assets to a relative with a disability. In addition, the individual with a disability can often create the trust himself, depending on the program for which he or she seeks benefits. These “self-settled” trusts are frequently established by individuals who become disabled as the result of an accident or medical malpractice and later receive the proceeds of a personal injury award or settlement.

A Special Needs Trust must be carefully drafted and implemented to conform with statutory and regulatory requirements to assure the ongoing SSI and Medicaid eligibility of the individual and certain rules must be followed in order for the Special Needs Trust to be allowed.