Legal and planning
Special needs trust
A special needs trust, also called a supplemental needs trust, holds money for a person with a disability. It is built to pay for extras without counting as the person's own resources for needs-based benefits such as SSI or Medicaid. Strict rules apply.
Why it matters for your family
Families use this tool so that an inheritance does not cost a disabled relative their benefits. The Social Security Administration states that, to qualify for its exception, the person whose assets fund the trust must be disabled under SSI rules, and other conditions apply. Trust rules differ for trusts funded by the person and by a third party. A common mistake is leaving money directly to a disabled adult. That can end benefits. Another is writing the trust without a lawyer, which can break the rules. Ask an elder law attorney who handles special needs planning. This is general information, not legal advice.
Source: secure.ssa.gov
Read more: What is Elder Law and Do You Need an Elder Care Attorney?
Related terms
- Revocable living trustA revocable living trust is a legal arrangement in which a person places assets in a trust and keeps the right to change it.
- MedicaidMedicaid is a joint federal and state health coverage program for people with limited income and resources.
- Medicaid planningMedicaid planning is the legal arrangement of income and assets so a person can meet Medicaid rules for long-term care.
- Income cap trust (Miller trust)An income cap trust, also called a Miller trust or income-only trust, holds part of a person's monthly income so the person can meet a state's Medicaid income limit for long-term care.
- Elder law attorneyAn elder law attorney is a lawyer who focuses on legal issues of older adults.
- Medicaid asset limitThe Medicaid asset limit is the cap on countable assets a person may own and still qualify for Medicaid long-term care.
