Supplemental Needs Trust
A Supplemental Needs Trust (SNT) is a specialized trust designed to provide financial support to individuals with disabilities without affecting their eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI).
It ensures that funds are used to enhance the beneficiary’s quality of life while preserving access to essential public assistance programs.
Key Features Of A Supplemental Needs Trust
- Preserves government benefits – Ensures eligibility for Medicaid, SSI, and other assistance programs.
- Provides additional financial support – Covers expenses not paid for by public benefits.
- Trustee-managed distributions – Prevents direct beneficiary control to comply with benefit requirements.
- Protects assets from creditors – Shields inherited or gifted funds from legal claims.
- Enhances quality of life – Allows funds to be used for housing, education, travel, and other personal needs.
Our Supplemental Needs Trust Services
Need to secure financial support for a loved one with disabilities while protecting their government benefits?
- Custom trust drafting – We structure SNTs to align with benefit eligibility requirements.
- Government compliance strategies – We ensure proper trust administration to avoid disqualification from assistance programs.
- Trustee guidance and management – Our team provides ongoing support for trust operations.
We specialize in estate planning solutions that provide long-term financial security for individuals with disabilities.
Who Should Consider Setting Up a Supplemental Needs Trust
A Supplemental Needs Trust is ideal for families who want to provide financial assistance to a disabled loved one without jeopardizing their government benefits.
It is particularly beneficial for:
- Parents or guardians of a child with disabilities – Ensures lifelong financial security without disqualifying benefits.
- Individuals receiving SSI or Medicaid – Protects eligibility while allowing access to additional funds.
- Families wanting to leave an inheritance – Allows for structured financial support without reducing public assistance.
- Personal injury settlement recipients – Shields legal settlements from impacting government aid eligibility.
- Caregivers planning for long-term support – Provides financial security when caregivers are no longer available.
How to Set Up a Supplemental Needs Trust
A Supplemental Needs Trust must be carefully structured to comply with legal and government benefit regulations. Here is our process:
- Initial consultation – We assess the beneficiary’s needs and public assistance eligibility.
- Trust drafting – Our attorneys create a customized SNT agreement.
- Trust funding – Assets such as inheritance, settlements, or gifts are transferred into the trust.
- Trustee appointment – A responsible individual or professional trustee is selected to manage distributions.
- Ongoing compliance and administration – We ensure the trust operates within legal and government guidelines.
Disadvantages of a Supplemental Needs Trust
While a Supplemental Needs Trust provides essential protections, it has some limitations:
- Beneficiaries cannot access funds directly – Distributions are made by the trustee to maintain benefit eligibility.
- Strict spending rules apply – Funds must be used for approved expenses such as housing, education, or medical care.
- Requires careful management – Improper distributions can disqualify the beneficiary from government benefits.
- Irrevocable in many cases – Once established, changes may be difficult to make.
- Potential Medicaid payback requirement – First-party SNTs may require reimbursement to Medicaid upon the beneficiary’s death.
Supplemental Needs Trust FAQ
No, to preserve benefit eligibility, a trustee must manage all distributions.
Funds can be used for housing, education, transportation, therapy, personal care, and other non-covered essentials.
No, as long as the trust is properly structured, it will not impact eligibility for government assistance.
A family member, professional trustee, or financial institution can oversee trust management.
In a first-party SNT, Medicaid may require reimbursement for care costs. In a third-party SNT, remaining funds can pass to other heirs.
Yes, a first-party SNT is funded with the beneficiary’s own assets, while a third-party SNT is funded by family or others.
Best Alternatives to a Supplemental Needs Trust
If a Supplemental Needs Trust is not the right fit, consider these alternatives:
- Special Needs Trust (SNT) – A broader term that includes both supplemental and primary needs trusts.
- Pooled Trust – A non-profit-managed trust that provides similar protections with professional administration.
- Discretionary Trust – Allows a trustee to manage distributions but may not fully protect benefit eligibility.
- Spendthrift Trust – Protects assets from mismanagement but does not specifically address disability needs.
- ABLE Account – A tax-advantaged savings account that allows individuals with disabilities to save without affecting benefits.
Each option serves different estate and financial planning needs. Our team can help determine the best strategy for securing financial support while maintaining benefit eligibility.
Ensure Long-Term Financial Security with a Supplemental Needs Trust
A Supplemental Needs Trust protects a disabled individual’s eligibility for government benefits while providing financial support for a better quality of life. At SJF Law Group, we help families create trusts that ensure long-term security and peace of mind.
Contact us today to set up a Supplemental Needs Trust that safeguards your loved one’s future.
