Also known as: special needs trusts · SNT · supplemental needs trust
Written by attorneys · grounded in primary & secondary sources — see below
A trust established by a parent, grandparent, legal guardian, or court for the benefit of a disabled person. The trust supplies supplemental needs of the beneficiary while preserving eligibility for public assistance programs that cover basic support.
After the settlor's death, Sophia Singh suffered a traumatic brain injury that left her unable to manage business assets. The trustee petitioned the court to convert her outright remainder interest in rental properties into a special needs trust. The court authorized the conversion because the injury was unanticipated and the change preserved assets while advancing the settlor's purpose of lifetime support.
Scott Summers created a trust funded with three hundred thousand dollars for his disabled daughter Selena Singh. The trustee used distributions only for medical equipment and therapies not covered by government programs. This structure allowed Selena to retain eligibility for basic public assistance while receiving extra support from the trust.
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The trust supplies supplemental needs of a disabled beneficiary while preserving eligibility for public assistance that covers basic support. Distributions are limited to items not provided by government programs.
A court may authorize the conversion under expanded equitable deviation when circumstances the settlor did not anticipate arise and the change furthers the trust purposes by preserving assets for the disabled beneficiary.
Yes. The modification changes the form of the beneficial interest from outright ownership to a supervised trust arrangement, yet modern doctrine permits the change when it better fulfills the settlor's intent.
A parent, grandparent, legal guardian, or court may establish the trust under federal statute to provide supplemental support without disqualifying the beneficiary from public assistance.
…an individual's eligibility for government assistance. Pub.L. 103-66, § 13611(b), codified at 42 U.S.C. § 1396p(d)(4)(A). A supplemental needs trust is a trust that is established for the disabled person's benefit and that is intended to supplement public benefits without increasing countable assets and resources so as to disqualify the…