Special Needs Trusts

A Special Needs Trust (SNT) or sometimes called a Supplemental Needs Trust, is a useful planning tool for a client who has a disability or has a family member who is disabled.  These trusts preserve a disabled beneficiary’s eligibility for government benefits that are critical in providing medical care and income necessary for support while allowing funds from the trust to be used for items or services that would enhance the beneficiary’s quality of life. 

Individuals with special needs often face expensive medical and living costs with limited income.  Many times, the individual must depend on public benefits, such as SSI (Supplemental Security Income) and Medicaid, to help.  Unfortunately, public benefits provide the bare minimum and do not provide the additional funds to make the disabled beneficiary’s life more comfortable.  SNTs can fill the gap by allowing assets in the trust to provide for the individual’s comfort and well-being.

There are two types of SNTs: A first party SNT and a third party SNT.  A first party trust is one established with the assets of the disabled beneficiary.  A third party SNT is established by parents, family members or friends to enrich the disabled beneficiary’s life. 

Both types of SNTs are designed so that the assets in the trust do not affect the beneficiary’s access to public benefits and the funds can be used to pay for the beneficiary’s supplemental needs (needs not covered by public benefits).  Funds from the trust can be used for almost anything except for services and goods provided by public benefits.  For example, the trust can pay for home and vehicle maintenance; experiences such as vacations and sporting events; monthly bills such as cable and internet; and, additional care not provided by Medicaid such as a private room and certain therapies.

A first party SNT contains a mandatory payback provision requiring that upon the death of the beneficiary, Ohio will be paid back from the remaining trust assets up to the amount of public benefits expended on behalf of the beneficiary.

Unlike a first party SNT, a third party SNT does not have a payback provision meaning that when the beneficiary dies, any funds remaining in the trust can pass to other family members without having to reimburse Ohio for the benefits it has provided.

Every person with special needs is different and every SNT should be created to meet their unique needs.  If you or a loved one might benefit from an SNT, please contact us.  We are committed to and passionate about assisting those with special needs.



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