Special Needs Trust

What it means

A trust set up to hold money for a person with a disability without making them lose SSI, Medicaid, or other means-tested benefits. There are two main kinds. A first-party SNT uses the disabled person's own money — often from a personal injury settlement or inheritance. It must include a payback clause for Medicaid on the person's death. A third-party SNT is funded by someone else, usually a parent or grandparent. It does not require Medicaid payback. Money in the trust can pay for things SSI and Medicaid do not cover — recreation, travel, adaptive equipment, education, vacations, and personal care extras. The trustee manages the funds and decides on payments. A SNT is a more flexible tool than a NY ABLE account for large amounts. Many families use both, with ABLE for everyday spending and the SNT for larger or longer-term needs. A lawyer is generally needed to draft the trust correctly.

When you might hear this

A special needs trust holds money for a person with a disability without disqualifying them from SSI, Medicaid, or other means-tested benefits. It is a key planning tool for families with a disabled child or for a person with a disability who receives a settlement or inheritance.

What to ask