A Special Needs Trust, also known as a Supplemental Needs Trust, is a trust designed to enable you to gift or leave assets to a disabled person, while still allowing him or her to continue qualifying for public benefits (such as Social Security and Medicaid).
Assets in these Trusts frequently include those received from inheritance or from a car accident or medical malpractice case. Without a Trust, any assets of the disabled person would need to be “spent down” before the public agencies would begin or resume providing benefits. Under a Supplemental Needs Trust, the disabled person would continue to collect his or her public benefits. The assets in the trust are then used to supplement his or her care and quality of life. Upon the death of the beneficiary, any assets remaining in the trust would be used to reimburse the public agencies and the remainder would go to the disabled person’s named beneficiaries.