What are Special Needs Trusts?

Under means-tested benefit programs like Medicaid and Supplemental Security Income (SSI), disabled people can only qualify for benefits if they have no more than about $2,000 in countable assets.

Special needs trusts allow disabled people to receive the benefit of trust money without being disqualified from receiving Medicaid and SSI. With a special needs trust, the money can be used to pay for expenses that are not covered by Medicaid or SSI without reducing the benefits that the beneficiary would otherwise be eligible to receive.

Special needs trusts may be established using assets of family members or other third parties or using the assets of the disabled person.

In December of 2016, the Senate approved H.R. 34, a law which permits a disabled person to create their own special needs trusts.  Prior to this, only a third party trust could be established.