Special needs trusts, or supplemental needs trusts, are a type of trust designed to provide benefits to a person who has a disability while protecting their assets. The main reason for choosing a special needs trust is that it is designed to allow the person with the disability to receive government health and disability benefits, including:
- Supplemental Security Income (SSI)
- Medicaid
- Social Security Disability (SSD)
- Medicare
- Section 8 housing
The purpose of a special needs trust is to provide the assets needed to improve the quality of life of the disabled person, primarily used to cover expenses the government benefits do not cover. For example, the special needs trust typically cannot be used for providing food and shelter, as it is expected that SSI will provide this. It may be used to cover medical equipment or services that improve the quality of life instead.
Special needs trusts have a unique place in the world of long-term care planning, as it is possible to transfer assets into a special needs trust to enable immediate eligibility for Medicaid coverage of long-term care. Seek the advice of an elder law attorney if you are planning on using a special needs trust as part of your long-term care planning.
