Leaving assets directly to a person with a disability can cause them to lose eligibility for government benefits that have strict income and asset limits. Even a small inheritance can trigger disqualification or require a spend-down. A Special Needs Trust avoids this problem by holding the assets outside the beneficiary’s ownership.

When properly drafted and administered, a Special Needs Trust can protect eligibility for:

• Medicaid
• Supplemental Security Income (SSI)
• Other state and federal needs-based programs

Each program has specific rules, which is why careful planning is essential.

Third-Party Special Needs Trust

• Funded with assets belonging to someone other than the beneficiary (such as parents or grandparents)
• Commonly used in estate planning
• No Medicaid payback requirement after the beneficiary’s death

First-Party (Self-Settled) Special Needs Trust

• Funded with the beneficiary’s own assets (inheritance, lawsuit settlement, back payments)
• Must meet strict legal requirements
• Typically requires Medicaid payback upon the beneficiary’s death

A Special Needs Trust can pay for items and services that supplement government benefits, such as:

• Education and tutoring
• Therapy and medical care not covered by benefits
• Transportation and travel
• Technology and adaptive equipment
• Personal care attendants
• Recreation, hobbies, and enrichment
• Furniture and household items

Improper distributions can affect benefits, so trustee guidance is critical

The trustee should be someone who is:

• Trustworthy and detail-oriented
• Willing to follow strict benefit rules
• Comfortable managing finances and records

Some families choose a trusted individual, while others use a professional or corporate trustee. We help families evaluate the best option for their situation.

Yes. In fact, a third-party Special Needs Trust is often designed so that multiple family members can contribute, either during life or at death, without affecting the beneficiary’s benefits.

Not necessarily. A Special Needs Trust manages financial assets, while guardianship or conservatorship relates to decision-making authority. Some families need both; others can avoid guardianship with proper planning. We help evaluate the least restrictive options available

That depends on the type of trust:

• Third-party trusts can pass remaining assets to other family members or beneficiaries of your choice
• First-party trusts typically must reimburse Medicaid for benefits provided, with any remainder distributed according to the trust terms

No. Special Needs Trusts can be created for:

• Children
• Adults
• Spouses
• Other loved ones with disabilities

Planning is just as important for adults who acquire disabilities later in life.

Some trusts are revocable (changeable) while others are irrevocable, depending on the structure and purpose. We explain these distinctions clearly so you understand what flexibility is available.

Mistakes can result in:

• Loss of Medicaid or SSI benefits
• Delays in care
• Legal challenges
• Trustee liability

Special Needs Trusts are highly technical and should not be created using generic forms or online templates.

If you have a child or loved one with a disability—or anticipate future care needs—it’s worth discussing your options with an experienced attorney. At Snake River Law, we help families understand whether a Special Needs Trust is appropriate and how to integrate it into a broader estate plan.