Special Needs Trust

A Special Needs Trust (SNT) is designed for persons with disabilities.  To maintain needs-based public benefits for ongoing care, planning for persons with disabilities is centered on a properly designed and administered trust, called a special needs trust \. The SNT provides funds to supplement public benefits without jeopardizing them.

An SNT makes it possible to appoint a trustee to hold property for the benefit of your disabled child after you’re gone. A special needs trust provides for the needs of a disabled person without disqualifying him or her from benefits received from government programs such as Social Security and Medi-Cal.

In order to qualify for the Social Security Administration’s Supplemental Security Income Benefits, (“SSI”), a disabled adult can’t hold more than $2,000 in assets, excluding a car and a home. SSI benefits, which average about $400 per month, must be spent on food, clothing and shelter expenses.

Assets:

Unlike other trusts, assets held in a special needs trust are not counted as part of the special needs beneficiary’s assets in determining  his or her eligibility for needs based public assistance.

Categories:

SNTs fall into two categories: (1) the third party SNT; and (2) the first party SNT.  The benefits recipient is the party.  Thus, first party SNTs are settled with the beneficiary’s assets.  Third party SNT’s are established by someone other than the beneficiary with the settlor’s own assets.

Medi-Cal Refund:

First party SNTs must provide for Medi-Cal reimbursement on the beneficiary’s death.  Third party SNTs need not.