A special needs trust preserves government benefits (Supplemental Security Income (SSI), Medi-Cal, Section 8, in-home support, food stamps, and utility payment assistance) for disabled beneficiaries. Without a special needs trust, receipt of funds may disqualify the beneficiary for future government benefits.
In 1993, Congress created an exception under the amendments to the Omnibus Budget and Reconciliation Act (OBRA-93) which specifically authorized the use of Supplemental Needs Trusts for the benefit of individuals who are under the age of 65 years and disabled according to Social Security standards.
Rather than leaving assets to a disabled individual, parents/guardians could establish a trust not under the control of the child that would have an independent trustee. This trust would continue for the lifetime of the child to own various assets that provisioned for the child, but due to the ownership by the trust, the assets are not counted as being owned by the child. This type of trust prevents the beneficiary from controlling the assets, but also maintains a means of helping the beneficiary with the assets held by the trust.
What are “Special Needs”?
Special needs are items, not provided by government support or a private health plan, which enhance the individual’s life, health, and welfare.
Dental, medical, and pharmaceutical expenses not covered elsewhere.
