What is a Supplemental Needs Trust?

Planning by parents can make all the difference in the life of a child with a disability, as well as that of their siblings who may be left with the responsibility for caretaking, on top of their own careers and caring for their own families.

Supplemental Needs Trusts

Special needs trusts (also known as “supplemental needs trusts”) are an important component of planning for a child with a disability, even though the child may be an adult by the time the trust is created or funded.

These trusts allow a beneficiary with a disability to receive inheritances, gifts, lawsuit settlements, or other funds and yet not lose their eligibility for certain government programs, such as Medicaid and Supplemental Security Income (SSI). The trusts are drafted so that the funds will not be considered to belong to the beneficiary in determining their eligibility for public benefits.

What a Special Needs Trust Can Pay For

Special needs trusts are designed not to provide basic support, but instead to pay for comforts and luxuries that could not be paid for by public assistance funds. These trusts typically pay for things like education, recreation, counseling, and medical attention beyond the simple necessities of life.

Three Types of Special Needs Trusts

There are three main types of special needs trusts: the first-party trust, the third-party trust, and the pooled trust. All three name the person with special needs as the beneficiary, but they differ in several significant ways, and each type of trust can be useful in its own way.

However you decide to provide for a child with special needs, proper planning is essential. Speak to your attorney to determine the best plan for your family.

Contact a certified elder law attorney(*), such as Linda Strohschein and her team at Strohschein Law Group for assistance. To set up an appointment, contact Strohschein Law Group at 630-300-0627.