Special Needs Planning

Estate Planning

In the vast majority of cases of a child approaching the age of majority, the establishment of trust will be necessary. Under these circumstances and depending on the size of the assets, it may be necessary to use a Special Needs Trusts (SNT). Special Needs Trusts have distinct features and advantages. They are designed to allow financial resources to remain available to individuals with special needs, but not impact the resource limitations of SSI or Medicaid. They protect the immediate invasion of assets by the state Medicaid agency.

There are a number of different Special Needs Trusts. The common factor is that all of them benefit the individual with special needs.


First Party SNT

These trusts are funded with monies of the person with special needs. Most commonly, this type of trust is created through a lawsuit settlement or inadvertent inheritance. Also called “Payback Trusts” since upon the passing of the beneficiary, any leftover assets will be used to first payback certain government benefits received over the beneficiary’s lifetime.

Third Party SNTs

This type of trust is not funded with monies owned by the individual with disabilities. Most commonly, these trusts would be funded by a parent, grandparents, or other friends or family members. The biggest advantage is that Third Party SNTs do not require pay-back of any Medicaid benefits.

Pooled SNTs

Pooled SNTs are typically used for a smaller amount of assets. The trusts are controlled by a non-profit Fiduciary. While assets will be used for the beneficiary’s benefit over his or her lifetime, there are required Medicaid required paybacks upon death. Additionally, any and all remaining assets are deemed the assets of the non-profit organization.

Our Government Benefits And Estate Planning brochure delves deeper into these benefits.

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