Protecting Government Benefits With Special Needs Trusts

A special needs trust (SNT) is a trust designed to supplement the needs of an individual whose necessary medical or living expenses are paid through programs such as Medicaid or SSI. Because these programs are “means tested” — based in part on income — an SNT enables the beneficiary to continue receiving aid despite an increase in income or assets. In general, the excess funds are placed into the SNT which then pays for the beneficiary’s supplemental needs such as recreation and consumer goods not otherwise covered by government benefits. Here are a few examples:

Divorce and the disabled child. Disabled children who receive SSI risk a reduction or termination of benefits when one parent is required to pay child support. Receipt of child support can reduce SSI benefits by one third for children under age 18 and dollar for dollar for children age 18 and older. Instead of … Read More