Supplemental Needs Trusts

Providing benefits to loved ones with special needs

A supplemental needs trust, also known as a special needs trust, is a financial vehicle that can provide benefits to a loved one (other than one's spouse, for whom there are special rules) with a disability or mental illness without jeopardizing that person's Medicaid benefits.

Medicaid provides health care, long-term care, and nursing home benefits to individuals with physical or mental disabilities. A Medicaid applicant must meet the asset guidelines for Supplemental Security Income (SSI) to be qualified, which is limited to $2,000 of assets for an individual and $3,000 of assets for married applicants. Thus, if you simply gave assets worth more than these amounts to a loved one receiving Medicaid benefits, your generosity would result in your loved one losing those Medicaid benefits.

However, assets in a properly drafted supplemental needs trust are generally not counted as assets belonging to the disabled person even though those assets will be used for his or her benefit. The trust document must be written carefully to ensure that its language does not conflict with the complex Medicaid provisions that might otherwise cause the beneficiary to become disqualified for benefits.

The attorneys at Ferguson Cohen LLP have experience in properly preparing supplemental needs trusts. Please call our office at 203-661-5222; ext. 15 to arrange a consultation to discuss your specific needs.