Special Needs Trusts

Special Needs Trusts help create a safety net for those in your family that will need extra care throughout their lifetimes.  These types of trusts can be used for individuals born with certain handicaps or individuals who are involved in an accident that caused them to become disabled in some way.Young family in park (istock)

Without a special needs trust, a disabled person would not be able to keep money set aside for them and still get the medical care they need through Medicaid.  The purpose of this Special Needs Trusts are to help you provide for all the needs of a disabled person, using both personal and governmental support.  

Unlike other types of trusts, the primary goal of a special needs trust is to give handicapped individuals the financial support they need throughout his or her life.  

Don’t know where to get started?  This article about the First Five Things to Do to Create a Special Needs Trust gives a great start to gaining information on a possible action plan.

Special Needs Trust Attorney Matthew Pfau, Esq. of Las Vegas has devoted his time and his talents to be able to advise families with special needs children.  Setting up this kind of trust is what Lawyers Plus can do for you.  Call (702) 518-7949 to set up your free consultation today.

Frequently Asked Questions (FAQ) about Special Needs Trusts

CLawyers Plus Logoan I protect my beneficiaries Medicaid rights with a Special Needs Trust?

One of the main purposes for creating a Special Needs Trust is to allow someone to maintain the advantages of having an estate but also utilize the government programs that are available. In order for a Special Needs Trust to make an estate exempt for the purposes of Medicaid eligibility it must meet certain requirements.

These requirements are as follows:

1) The trust must be established by a parent, grandparent, legal guardian, or a court;

2) The trust must be for the sole benefit of a beneficiary who is an individual under age 65 and the beneficiary must be disabled according to the Social Security definition; and

3) The trust must provide that upon the beneficiary’s death, the state is reimbursed from the trust for all Medicaid benefits paid on behalf of the beneficiary unless exempt (see below).

ILawyers Plus Logos a Supplemental Needs Trust and a Special Needs Trust the same?

 A Supplemental Needs Trust is also known as a Special Needs Trust. A Supplemental Needs Trust can also be called a “third-party trust” or a “non-payback trust.” They are different from a Special Needs Trust where the trust is created and funded by the disabled individual.

The Supplemental Needs Trust funds are funded by someone other than the disabled individual and are available to pay for needs during the person’s lifetime.  After the disabled person has passed away, the remaining trust funds are distributed as according to the terms of the trust document. After the trust is settled there is no requirement to pay the government back for benefits received.

WLawyers Plus Logohat can a Special Needs Trust be used for?

Special Needs Trust have very specific rules as to what can and cannot be purchased with the funds of the trust estate. Different states have different regulations as to what can and cannot be purchased. The law states that a Special Needs Trust can be used for “supplemental and extra care over and above what the government provides.” It is the trusts job to follow what is not offered by governmental coverage and fill in the gaps by covering the shortfall.

Here are some examples of items that can be purchased with a Special Needs Trust and still qualify for public benefits.

 The intent of a Special Needs Trust is not only to allow the maintenance of government benefit but to provide for an great lifestyle for a person with special needs. With a properly managed Special Needs Trust a disabled individual will be able to live a very full life and experience everything that an individual should.

CLawyers Plus Logoan’t I just leave money to another family member to administer to my special needs beneficiary?

     Rather than pay an attorney to create a special needs trust, you may be think to leave some money to a friend or relative who agrees to watch out for your loved one’s needs after your death. However, the short term benefit you gain by not having to pay an attorney will have several long term disadvantages.

The main issue with not creating a Special Needs Trust is that because the person to whom you leave the property will own it outright. There will be no way to ensure that the money will end up benefiting your loved one regardless of how honorable the person’s initial intent may be. For example, the money you have set aside for your disabled loved one would be subject to that person’s creditors in a lawsuit or bankruptcy.

Additionally, the property could pass to that person’s heirs if he or she suffers an untimely death. If that person became divorced, the spouse could claim a share of the money. The person you entrust with the money could also spend the money on a car or something they want. If the person spends the money on themselves there is nothing legally that you can do about it since they will not be governed by the rules that trustees are subject to under a properly established trust.

Lawyers Plus LogoDoes my trust have to repay Medicaid or other State and Local Funding Sources?

 Typically, you do not have to repay Medicaid or other State and local benefit sources while the beneficiary is living. The rules state that payback to Medicaid is required unless you meet certain circumstances. These circumstances are as follows:

1) A Special Needs Trust is funded by a third party (like parents) or

2) A Trust that is created out of a court order due to a personal injury settlement.

If assets do need to be repaid, only the assets that originally belonged to the disabled individual before the trust existed will need to be paid back.


For More information about Special Needs Trusts, check out the National Special Needs Network’s FAQ section, and our recent articles about Special Needs planning for families and supplemental income trusts for personal injury settlements.


Special Needs Trust Attorney Matthew Pfau, Esq. of Las Vegas has devoted his time and his talents to be able to advise families with special needs individuals.  Setting up this kind of trust is what Lawyers Plus can do for you.  Call (702) 518-7949 to set up your free consultation today.


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