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What Is a Special Needs Trust?

Elderly woman in wheel chair with guardian

Learn about the advantages of transferring assets to a loved one with special needs using a Special Needs Trust.

Helping a loved one who has special circumstances

Many members want to financially assist a loved one who has special needs but worry that any funds given to them could disqualify that loved one from receiving Supplemental Security Income, Medicaid, or other needs-based public assistance. They may see that their loved ones are already receiving the basic care they need using governmental benefits, but want to find a way to provide an additional resource to make their life more comfortable. A Trust specifically designed for someone with special needs could help accomplish this goal.

A Trust is a document typically prepared by an attorney, in which an individual or corporation can be appointed as trustee to manage specified property on behalf of a beneficiary. Transferring assets to a qualifying Special Needs Trust during your life or through your Will, rather than outright to the beneficiary, allows the beneficiary to remain eligible for governmental benefits. Assets in a Special Needs Trust can be used as a resource for those items not covered by governmental benefits, such as therapies, special equipment, or other items to improve the beneficiary's well-being.

It may be difficult for an individual as trustee of a Special Needs Trust to know which distributions could affect governmental benefits. To avoid this uncertainty, you may choose to name a corporate trustee. A corporate trustee has the experience and resources to effectively manage Trust assets and understand permissible distributions from a Special Needs Trust. They will work with the beneficiary and their healthcare providers to understand the circumstances involved and administer the Special Needs Trust to enhance the beneficiary’s quality of life.