Advanced Underwriting Consultants

Question of the Day – Mach 27

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Question: What is a special needs trust?

Answer: Those who want to make assets available to special needs beneficiaries should generally consider drafting a special needs trust.  A special needs trust or supplemental needs trust (SNT) is a specialized legal document designed to provide benefits to the beneficiary without adding to their countable net worth or countable income.


An SNT can be created to come into existence immediately, or it can spring into existence in the future.  For example, a special needs person’s parents might create an SNT inside of the last will or revocable trust.

An SNT enables a person with a physical or mental disability to have, held in trust, an unlimited amount of assets.  If the SNT is drafted and administered properly, those assets do not count against SSI or Medicaid eligibility.

An SNT gives the trustee the ability to provide for supplemental and extra care over and above that which the government provides. The SNT must not require, the trustee to make distributions for the special needs beneficiary, as such a requirement would cause the trust assets to count as available resources.

To be effective, SNTs must be irrevocable once they are created and funded. An attorney drafting the trust will coach the family about how the trust should be administered, and will include directions in the trust for its termination and ultimate distribution to family members or other beneficiaries.

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