Understanding the Basics

What Is a Special Needs Trust?

A Special Needs Trust (also called a Supplemental Needs Trust) is a legal arrangement that allows a person with disabilities to receive an inheritance, gift, or settlement without losing eligibility for means-tested government benefits such as Supplemental Security Income (SSI), Medicaid, Section 8 housing, and SNAP benefits.

There are two primary types. A third-party special needs trust is funded by someone other than the beneficiary (typically parents or grandparents) and has no payback requirement to the government upon the beneficiary's death. A first-party (or self-settled) special needs trust is funded with the disabled person's own assets, often from a personal injury settlement or inheritance, and must include a Medicaid payback provision.

The trust is designed to supplement, not replace, government benefits. The trustee can use trust funds for expenses that government programs do not cover: personal care attendants, therapies, education, entertainment, travel, technology, vehicle modifications, and quality-of-life improvements. The trustee must not provide cash directly to the beneficiary or pay for food and shelter in a way that would reduce SSI benefits.

Is It Right for You?

Who Is a Special Needs Trust For?

Parents of Children With Disabilities

The most common use case. Parents can create a third-party SNT in their estate plan to ensure their child is cared for after they are gone, without disqualifying the child from essential benefits. Family and friends can also contribute.

Grandparents Leaving an Inheritance

A well-meaning inheritance can destroy a disabled grandchild's government benefits. Leaving the inheritance to a special needs trust instead of directly to the grandchild preserves benefits while providing supplemental support.

Personal Injury Settlement Recipients

A person who becomes disabled and receives a lawsuit settlement or insurance payout can place those funds in a first-party SNT to preserve their Medicaid and SSI eligibility while using the funds for supplemental needs.

Families Planning for Long-Term Care

For adults with intellectual disabilities, autism spectrum disorders, chronic mental illness, or degenerative conditions, a SNT provides a lifetime framework for supplemental care management across multiple caregivers and life stages.

What You Get

Key Features

Government Benefits Preserved

SSI, Medicaid, Section 8 housing, SNAP, and other means-tested benefits remain fully intact. The trust supplements, never replaces.

Quality of Life Enhancement

Trust funds cover therapies, education, recreation, technology, travel, personal care, vehicle modifications, and other items that improve daily life.

Lifetime Professional Management

A professional or family trustee manages funds across the beneficiary's lifetime, ensuring proper distributions that do not jeopardize benefits.

Letter of Intent Included

We help you create a detailed Letter of Intent describing your loved one's daily routines, preferences, medical history, and care instructions for future caregivers.

The Process

How It Works

1

Needs Assessment

We evaluate the beneficiary's current benefits, care needs, and family resources to determine whether a first-party or third-party SNT is appropriate.

2

Trust Drafting

The trust is drafted with state-specific provisions, approved distribution categories, Medicaid payback clauses (if first-party), and trustee selection guidance.

3

Attorney Review & Execution

A licensed attorney reviews the trust for compliance with SSA regulations and state Medicaid rules. First-party trusts may require court approval in some states.

4

Ongoing Administration

DynastyOS supports trustees with distribution guidance, benefit-safe spending categories, accounting, and annual trust reporting to ensure ongoing compliance.

Protect the People Who Need It Most

Peace of Mind for Your Family's Future

A special needs trust is not just a legal document. It is a lifetime care plan for the person you love most. Start with a free consultation to design the right structure.

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Common Questions

Frequently Asked Questions

What is the difference between a first-party and third-party SNT?

A third-party SNT is funded by someone other than the disabled person (parents, grandparents, other family) and has no Medicaid payback requirement when the beneficiary dies. Any remaining assets pass to other family members. A first-party SNT is funded with the disabled person's own money (settlement, inheritance, savings) and must include a provision repaying Medicaid for benefits received during the beneficiary's lifetime.

What can the trust pay for?

The trust can pay for supplemental needs not covered by government benefits: therapies, personal care, education, recreation, travel, electronics, vehicle modifications, home accessibility improvements, entertainment, clothing, and more. The trust should generally avoid paying cash directly to the beneficiary or paying for food and shelter, as these can reduce SSI benefits.

Who should be the trustee?

The trustee must understand both the beneficiary's needs and the complex rules governing benefit-safe distributions. Options include a trusted family member, a professional fiduciary, a pooled trust administered by a nonprofit organization, or a combination using a corporate trustee with a family advisor. The disabled person should not be the trustee of their own first-party SNT.

Can a special needs trust own a home?

Yes. A special needs trust can purchase and hold a home for the beneficiary. This is often the most significant quality-of-life improvement the trust can provide. However, the trust paying for housing-related expenses (rent, mortgage, property taxes, utilities) may result in a reduction of SSI benefits under the "in-kind support and maintenance" rules. Our attorneys structure these arrangements to minimize benefit impact.

What happens to the trust when the beneficiary dies?

For a third-party SNT, remaining assets pass to whomever the grantor designates (typically other family members). For a first-party SNT, remaining assets must first repay the state Medicaid agency for benefits provided during the beneficiary's lifetime. Any balance after Medicaid reimbursement passes to the remainder beneficiaries named in the trust.

Every Family Member Deserves Protection

A special needs trust ensures your loved one receives the care and quality of life they deserve, for their entire lifetime. Start with a free consultation.

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Attorney-Reviewed Letter of Intent Included Ongoing Administration Support