SPECIAL NEEDS TRUST

Summary

A Special Needs Trust is a legal arrangement designed to provide financial support for individuals with disabilities while preserving their eligibility for government benefits like SSI and Medicaid. The trust holds and manages assets on behalf of the beneficiary, allowing them to receive supplemental financial support without disqualifying them from means-tested government programs that have strict asset limits.

Usage Context

Essential when studying estate planning for families with disabled members, disability law, government benefit preservation strategies, and trust administration. Critical for understanding how to balance private financial support with public benefit eligibility.

Common Confusions

• Thinking the beneficiary can directly access trust funds like a bank account
• Confusing first-party and third-party Special Needs Trusts
• Believing any expense can be paid from the trust without affecting benefits
• Assuming all trusts for disabled individuals are Special Needs Trusts
• Thinking government benefits are automatically restored if trust funds are spent down

Related Terms