If you have a loved one with disabilities or special needs, you have likely thought about how you will protect and provide for them after you have passed. Providing for a loved one with special needs does not need to be difficult; however, it will need to be done carefully to avoid any unintended consequences. An experienced attorney can help you tailor a plan to provide for your loved one in a way that supports a fulfilling lifestyle and serves their individual abilities and preferences.

The most common way to provide for a loved one with special needs is to create a Special Needs Trust (SNT). However, SNTs can be structured in a number of ways, and each structure creates a different impact on the beneficiary’s finances. SNTs can be General Support or Supplemental Needs trusts, and they can be third-party funded or “self-settled.” SNTs can also be kept individually for the beneficiary or be “pooled” with other SNTs to save on costs of administration.

Like other trusts, the grantor can set guidelines for how the funds should be used to support the named beneficiary. These controls, as well as a well-chosen trustee, provide some oversight and protection from the financial abuse of a disabled person, and they also protect the funds from creditors. Leaving assets in an SNT ensures that those funds will only be spent on the specific needs of the beneficiary outlined in the trust document.

Circumstances to Consider when Structuring a Special Needs Trust

The most important matter to consider when choosing how to structure an SNT is whether the trust will be sufficiently funded as to provide all care and support for the beneficiary throughout their lifetime or whether the beneficiary will also seek to take advantage of federal benefits programs such as Supplemental Security Income (SSI) and Medicaid.

If your loved one is already receiving or intends to take advantage of SSI and Medicaid, gifts and bequests will need to be handled very carefully to avoid disqualifying them from these programs or any other means-based disability benefits. When a grantor dies and passes an inheritance in the form of cash, an insurance policy payout, or a bank account, these assets may disqualify the beneficiary for SSI or Medicaid. Transfers of real estate, vehicles, or any other personal property will not affect eligibility.

If the beneficiary does not intend to apply for any means-based benefits, then they are likely best suited for a General Support Special Needs Trust. This is a relatively straight-forward trust that allows the trustee to release funds to provide for any and all general needs of the beneficiary.

However, if the beneficiary does intend to utilize public benefits such as Medicaid, the trust will need to be structured in such a way that the Social Security Administration (SSA) does not view the funds as “available” to the beneficiary. This is called a Supplemental Needs Trust, and the majority of SNTs fall into this category. To avoid disqualification from public disability benefits, the trust document will need to restrict the use of funds so that they cannot be used for food and shelter. Outside of those two categories, the SSA does not place too much restriction on how funds can be used.

Special needs trust funds are commonly used for –

Personal care attendants and nursing


Home furnishings

Out-of-pocket medical and dental expenses



Vehicles (if titled to the trust)

Physical rehabilitation

The trust document can be as permissive or restrictive as the grantor wishes. How the funds are distributed for these purposes, however, will need to be more narrowly controlled. Generally, the trust will need to pay for any services, goods, or expenses directly, rather than providing the funds to the beneficiary to pay for such expenditures. Again, this is to ensure that the funds are not “available” to the beneficiary and will therefore not disrupt governmental benefits.

Funding a Special Needs Trust

An SNT can either be funded by a third party (this can be one family member or a number of people who wish to provide for the beneficiary’s support) or self-settled. A self-settled SNT is one that is funded by the assets of the beneficiary him- or herself. These funds may have been earned by the individual prior to becoming disabled, received as a result of a personal injury lawsuit, or been given prior to the creation of a trust.

A self-settled SNT is slightly more restricted than a third party funded SNT. If a trust is funded with the beneficiary’s own assets, federal law requires that, after the beneficiary dies, any Medicaid benefits paid out to the beneficiary during his or her life should be reimbursed out of the remainder of the trust. Federal law also requires that a self-settled supplemental care SNT must be for the benefit of a beneficiary who is 1) disabled within the definition in the Social Security Act, and 2) under the age of 65 when the SNT is established. A beneficiary over the age of 65 is limited to creating a supplemental care SNT that is “pooled.”

If the SNT is funded by anyone other than the beneficiary, there is no Medicaid payback or limit on the age or disability of recipient.

As you plan for the future of your loved one, it will be important to communicate your intentions to anyone else who may wish to bequeath some assets or make financial gifts to that individual. Even if you set up an SNT to preserve your beneficiary’s eligibility for public benefits, that eligibility can still be jeopardized by financial gifts from other sources. It will be essential that you communicate the existence of the trust to anyone who may wish to contribute to your loved one’s support.

When choosing how much to put into an SNT, you will need to take into account the specific needs of the individual and the expected level of care that she or he will require over time. The trust will end either when the beneficiary dies or when the funds have been exhausted, so it will be important to carefully assess how much you are willing or able to provide.

Selecting a Trustee

As with any trust, the funds set aside to support the beneficiary will need to be managed by a trustee. This can be a family member or friend; however, if they are also listed as the remainder beneficiaries of the trust (meaning that they will receive any assets left remaining in the trust when the beneficiary dies), this may create a conflict of interest. Performing the role of a trustee for an SNT is also particularly labor intensive and requires that the trustee understand the beneficiary’s needs. Most families choose to have a professional trustee, such as a bank or a trust company, manage the trust. Corporate trustees usually charge an annual fee of around 1% of the value of the trust.

If the amount to be given through a trust is relatively modest, the cost of a corporate trustee may be prohibitive. In that instance, a pooled SNT managed by a nonprofit might make more sense.

Pooled Special Needs Trust

If there are limited funds to be placed into an SNT, the trust is to be self-settled and the beneficiary is over the age of 65, or if you are simply more comfortable having a nonprofit or state government trustee, you may choose to fund a “Pooled” SNT. Traditionally, a pooled SNT is a mechanism that allows nonprofit organizations to act as trustees for a group of beneficiaries. This saves on trustee costs, and the trustees may be more experienced with the relevant laws and needs for your loved one. As of 2016, states may now also manage their own pooled SNTs, called ABLE accounts. Family members can fund up to $100,000 into an ABLE account without impacting eligibility for means-based benefits.

Ask for Help

This may seem complicated and overwhelming, but an experienced attorney will be able to work with you to create a Special Needs Trust that is best suited for the needs of your loved one. An attorney will ensure that the trust complies with relevant federal and state law, is broad enough to adapt to a beneficiary’s changing needs, and maximizes your loved one’s access to governmental benefits. If you are caring for someone with special needs, start by calling our office in Atlanta at (770) 933-9009, to schedule an appointment with our lead estate planning attorney.