Special Needs Trusts
A Special Needs Trust (“SNT” or Supplemental Needs Trust) provides for a disabled person’s needs based on the decisions and discretion of the trustee. An SNT is typically used to help support a disabled person eligible for government financial aid. To avoid impacting government aid eligibility, SNTs are typically set up to pay for their needs above and beyond what the government benefits cover (e.g. food, shelter, or clothing). This can include luxuries; travel and transportation; housekeeping; personal and professional services; telephone & internet; legal expenses; expenses for family visits; funeral costs.
SNTs are typically set up by a parent or grandparent who does not have a legal obligation to support the disabled person. However, a disabled person can self-settle a SNT for their own benefit. These SNTs are typically irrevocable and provide that amounts remaining in the SNT when the disabled person dies will repay Medicaid for any incurred expenditures. Estate planners, or personal injury attorneys representing a disabled person, need to consider the financial impact of inheritances or injury settlements on their client’s government aid eligibility.