Special needs planning ensures your loved one with a disability is financially supported without losing eligibility for government benefits. It often involves creating a Special Needs Trust (SNT), which holds assets for their benefit under specific legal and tax guidelines.
What is a Special Needs Trust (SNT)?
A Special Needs Trust (sometimes called a Supplemental Needs Trust) is designed to provide for an individual with disabilities while preserving their eligibility for public assistance programs such as Medicaid or Supplemental Security Income (SSI).
Unlike a standard trust, an SNT is structured to supplement — not replace — government benefits. These trusts follow strict rules that vary by state, but generally include:
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The beneficiary cannot directly access the trust funds.
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The trust cannot be revoked by the beneficiary.
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The individual must meet the “permanently and totally disabled” criteria under Social Security rules. Note that these rules differ between adults and children.
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The trustee must avoid distributions that could jeopardize government benefit eligibility.
Because of these rules, proper legal drafting and ongoing administration are critical.
Why are Special Needs Trusts Used? And Why Are They Important?
A Special Needs Trust safeguards your loved one’s financial security and quality of life. Government programs often only cover basic needs like housing, food, or medical expenses — but an SNT can fund additional care, education, recreation, and other resources that enhance overall well-being.
Without proper planning, a well-intentioned inheritance or gift could disqualify your beneficiary from vital government benefits. An SNT ensures support continues seamlessly — both emotionally and financially — long after you’re gone.
Who Should Consider Setting Up a Special Needs Trust?
An SNT is often recommended for:
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Parents or guardians of a child with a disability.
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Siblings or relatives supporting a disabled adult family member.
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Individuals expecting an inheritance or settlement who receive government assistance.
If your family’s situation involves any of these, it’s worth consulting with a financial advisor and an experienced estate planning attorney.
How Does Mission Wealth Help with Special Needs Trusts?
At Mission Wealth, our advisors collaborate with you to understand your family’s long-term goals and values. We coordinate with estate planning attorneys and corporate trustee services to ensure your trust is properly established and administered.
Our goal is to help you build a comprehensive legacy plan — one that protects your loved ones and provides peace of mind for generations to come.
If you’re ready to explore special needs or legacy planning, schedule a complimentary strategy session today.
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00463706 10/22 (updated 10/25)
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