Supplemental Needs Trusts

A supplemental needs trust refers to trusts for persons with special needs who are also recipients of important public benefit programs, such as Medicaid and SSI, Supplemental Security Income. The primary purpose of these trust is to make assets available for the benefit of the person with disabilities without making the assets count towards that beneficiary’s eligibility for social welfare programs such as Medicaid.

Watch this video that explains the difference between a supplemental needs trust and a special needs trust.

Supplemental needs trust can be a third party supplemental needs trust. This trust is created by a third party (not by the disabled individual) and funded with assets of that third party. The third party who creates and funds the trust is usually a parent or grandparent for the benefit of a disabled child or grandchild.

The second type of supplemental needs trust is a self-funded trust, also referred to as a "self-settled" trust because it is created by the person with disabilities and funded with their own funds. With this trust, when the person dies, the trust must reimburse the state for any medical assistance paid by the state to the person with disabilities under the Medicaid program.