Local Law Firms Home > Probate & Estate Planning Wills Overview > Trust Planning > Special Needs Trust A special needs trust, also referred to as a supplemental needs trust, is a legal document that provides for a mentally and/or physically disabled individual’s extra and supplemental needs, other than basic food, shelter and medical expenses that may already be covered under various programs such as Medicaid and Supplemental Security Income. Often, a special needs trust is created for a disabled child. An appointed trustee for a special needs trust could be a family member, friend, committee, a trust administrator, or a bank or other financial institution.
A special needs trust may be funded through a will or gifts from family members and friends made directly to the trust instead of the disabled individual. When the disabled person is a child, funding may come from second-to-die or survivorship life insurance policies that cover both parents and pay out after the death of the second parent. When a disabled child is going to inherit assets or receive monetary compensation from a lawsuit, it is vital to set up a self-settled trust ahead of time to avoid losing Medicaid eligibility. |