A Special Needs trust is a trust set up for the benefit of a disabled individual under 65 years of age. Such a trust, when properly established, is not a countable resource to the beneficiary for Medicaid and other means-tested public assistance programs, even if it is funded with the disabled beneficiary’s own money and other property.
Current law allows for the Special Needs trust to be created by a parent, grandparent or legal guardian of the disabled beneficiary, or by a Court order. It does not allow the disabled beneficiary to establish the trust for herself. However, there is pending federal legislation, known as the Special Needs Trust Fairness Act, which will correct this prohibition and allow a mentally competent disabled person to establish her own Special Needs Trust.
If you or a loved one suffer from a disability and have questions about protecting resources and qualifying for public assistance, consult an elder law attorney to discuss your issues and circumstances.