A special needs trust is a legal instrument that is designed to provide for the care and financial support of a person with disabilities, while also protecting their eligibility for certain government benefits, such as Medicaid and Supplemental Security Income (SSI).
The purpose of a special needs trust is to allow a person with disabilities to receive financial assistance without disqualifying them from government benefits that are means-tested, which means they are based on the individual’s income and assets. By placing funds in a special needs trust, the beneficiary can receive support and care that supplements, rather than supplants or replaces, their government benefits.
A special needs trust can be created by an individual for their own benefit, or it can be established by a family member or guardian on behalf of the person with disabilities. There are several types of special needs trusts, including first-party trusts (funded with the beneficiary’s own assets), third-party trusts (funded with assets belonging to someone else), and pooled trusts (established and managed by a nonprofit organization).
Special needs trusts are subject to strict rules and guidelines, and it is recommended to consult with a qualified attorney who is knowledgeable in this area to ensure that the trust is properly established and managed to achieve the intended goals.
Click here to visit RELEP’s Special Needs Planning webpage.