A special needs trust is a planning tool designed to support individuals with disabilities who rely on government benefit programs. When structured correctly, it helps enhance the beneficiary’s quality of life and independence by providing supplemental resources while preserving their eligibility for public assistance. Through careful drafting, the trust’s assets can be used to meet additional needs without jeopardizing essential benefits.
Special needs trusts generally fall into three categories: first-party trusts funded with the beneficiary’s own assets, third-party trusts created with funds from someone else—typically a parent or loved one—and pooled trusts, which combine resources from multiple beneficiaries under the management of a nonprofit organization.