Special Needs Trust
Special needs trusts (also known as "supplemental needs" trusts) allow a disabled beneficiary to receive gifts, lawsuit settlements or other funds and yet not lose his or her eligibility for certain government programs. Such trusts are drafted so that the funds will not be considered to belong to the beneficiary in determining eligibility for public benefits. Special needs trusts are designed not to provide basic support, but instead to pay for comforts and luxuries that could not be paid for by public assistance funds. These trusts typically pay for things like education, recreation, counseling and medical attention beyond the simple necessities of life.

Under current Federal law, any inheritance of more than $2,000 disqualifies individuals with disabilities from most federal needs based assistance, including Supplemental Security Income and Medicaid. Benefits from state public assistance programs may also be affected.


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