Special Needs Trust (Supplemental Needs Trust)
Preserving eligibility for vital government assistance (SSI / Medicaid) while enhancing quality of life.
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Overview & Purpose
A specialized third-party trust established to supplement, rather than supplant, needs-based public benefits for a loved one living with physical, intellectual, or developmental disabilities.
Who May Consider It
- You have a child, sibling, or relative who receives or may receive Supplemental Security Income (SSI) or Medicaid.
- You want to leave money for their enrichment, therapies, recreation, technology, and housing without disqualifying their benefits.
- Ensures trust principal and income are not counted as available resources for SSI and Medicaid asset tests.
- Allows funds to pay for dental care, private caregivers, education, vacations, and personal assistive technology.
- Third-party variant requires NO Medicaid payback upon beneficiary’s passing; remaining funds go to your other heirs.
- Must NOT provide direct cash gifts or payments for food/basic shelter without triggering SSI benefit reductions.
- Does not replace the need for guardian of person/estate designations where legally required.
Important Trade-offs
- Strict expenditure compliance rules; trustee must understand Social Security POMS guidelines.
Relevant Assets
State Medicaid agency regulations interpret trust disbursements differently; exact local wording is essential.
Questions to Discuss with an Attorney
- Should we establish a Third-Party SNT or does the beneficiary have their own funds requiring a First-Party (d)(4)(A) trust?
Related Documents
Sources & References
This article was prepared using publicly available legal and government sources. Laws change, and readers should verify current rules in their jurisdiction.
Reviewed for educational accuracy
Last reviewed: September 30, 2026 · Next scheduled review: March 2027
This article is educational information and is not legal advice. Laws vary by jurisdiction. No attorney has reviewed this material unless a named, licensed attorney is credited above.
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