Special Needs Trusts

What Is A Special Needs Trust


Special Needs Trusts are created to comply with the complex rules of federal needs-based benefits programs that are important and may be available to people with disabilities, such as:

  • Supplemental Security Income (SSI)
  • Medicaid or VA Aid and Attendance
  • Section 8 Housing
  • Food Stamps

When drafted and administered properly, a Special Needs Trust will allow the beneficiary to benefit from the Trust while retaining eligibility for public benefits and maintaining the current amount of benefits being received.

Trusts can be created for infants through senior citizens!

Who Can Create A Special Needs Trust?

  1. The individual with the “special needs” can fund the trust themselves with personal assets or possibly through an insurance settlement, etc. (note: you cannot create a SNT if you are over 65)
  2. A Third Party or Self-Settled: This would be someone like a parent, grandparent or sibling who would create the Trust for the benefit of the special needs individual.

Why Should You Create A Special Needs Trust?

The primary reason is for the funds within the Trust to supplement benefits from a Government program such as SSI, Medicaid, Special Assistance or special waiver programs which might pay for treatments, therapy or housing.

For example, you would not want an inheritance to be paid to an individual who is on a means-tested benefits program; the increase in assets would be a disqualifying event. A better approach would be to have proceeds from an inheritance or insurance policy go directly to a trust.

Who Should Be The Trustee?


You have two choices:

  1. You can choose an individual to administer the provisions of the Trust. It is important that this individual have some knowledge of the workings of the trust as it pertains to the Government benefits. Other considerations should be the individual’s age, willingness and ability to as Trustee, and their financial skill & expertise. You may wish to have co-trustees, but should always consider having a contingent trustee in the event the first and primary trustee can no longer serve.
  2. Some families will pick an attorney, CPA or financial institution to serve as Trustee. There is a cost of such services, which is usually a percentage of the trust assets

Funding the Trust

“How much” is a frequent question. There are several ways this can be answered:

  1. You can put in as much or as little as you can afford
  2. The decision might be based on extra needs beyond public funds available
  3. What is the age of the SNT beneficiary?
  4. Use of Life Insurance products

What Next?


The idea of a trust, trustees, funding and checking beneficiary designations while providing love and care will often seem overwhelming.

To answer your questions, we offer free phone or in-person consultations………we’ll even come to you and meet at your home, office, care facility or our Raleigh office.

Let us know what is best for you. Please contact us today.

Call today to learn more about trust services from Carolina Estate Counsel

Kevin Huston, Elder and VA Accredited Attorney   (919) 741-6565

Rick Messemer, Community Liaison   (919) 656-2959 • rick@carolinaestatecounsel.com