Special Needs Trusts

Betty and Lauren discuss the importance of special needs trusts.

Special Needs Trusts

Families should ensure that any private funds do not jeopardize the person’s eligibility for public benefits such as Medicaid and Supplemental Security Income (SSI). A special needs trust can be a supplement to the person’s public benefits. A special needs trust is a legal vehicle that manages funds for the benefit of a person who needs some assistance in daily living. There are two basic kinds of special needs trusts:

Why a trust?

By using a special needs trust, families can provide on-going support to an individual with I/DD even after the parents or caregivers have passed away. Medicaid and SSI also have limits on how much a person may earn and in how much he or she may have in assets. If a person goes over those income or asset limits, he or she may lose those benefits and vital services may stop.

What Can a Trust Pay for?

Special needs trusts are used to purchase many goods and services not covered by SSI and the Medicaid program in the individual’s state. Here are a few examples:

Trust Options

  1. Pooled Trust – Managed by a non-profit organization. Individual accounts are established for each beneficiary. The accounts are pooled together for investment purposes and maintained in one pooled trust. Often, you can establish an account in a pooled trust without any funds and later fund it with a life insurance policy or through a will. Learn which chapters of The Arc manage a pooled trust near you.
  2. Individual Trusts – Established privately by the individual or family. An individual trust can be managed by a professional trustee or by a family member or friend.

Who is going to help manage the money?

Plain Language

For information on Special Needs Trusts in plain language, click here:
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