Deeb Elder Law, P.A.
6675 13th Ave N, Suite 2C
St. Petersburg, Florida 33710
Phone: (727) 381-9800

Fax: (727) 381-1155

 

 

A Special or Supplemental Needs Trust (SNT) is a Trust established for individuals who have disabilities and receive government assistance or for those who may need assistance in the future, such as Medicaid or Social Security. Placing an individuals assets into a Special Needs Trust will allow those assets to become non-countable for purposes of eligibility for these government benefits.

There are several types of SNT’s:

1) A (d)(4)(a) Trust is for persons under 65 and is named for the section numbers of the Federal law which authorizes the trust. It is created with the beneficiary’s own assets, and is established to protect those assets, while still allowing the beneficiary to receive both Medicaid and/or SSI benefits. This type of SNT is often established when a beneficiary is awarded a settlement, or court awarded funds, or an inheritance. This type of trust requires a "payback" provision. The "payback" provision requires that after the death of the beneficiary of the trust, any remaining assets must first be used to pay the government back for the assistance which was provided.

2) A (d)(4)(b) or Qualified Income Trust or (QIT) is a trust into which the income of the beneficiary is deposited in order to allow an individual who would otherwise have income above the eligibility limit to qualify for benefits. A QIT must have a payback provision.

3) A (d)(4)(c) or Pooled Trust works like a (d)(4)(a) trust except the individual may be over 65. The trust is administered by a charitable organization. After the death of the beneficiary the remaining assets must either pay back the government to the extent of benefits received, or the charity may retain the remaining assets to be used for charitable purposes.

4) Third Party Special Needs Trust allows any individual, other than the beneficiary, to put funds into an SNT for the supplemental or other needs of a person with the disability, who receives government benefits or may need to receive them in the future. The SNT pays for supplemental needs and luxury items that government benefits do not provide. Some examples include dental treatments, special cosmetic or beauty needs, and travel, to name a few. The beneficiary cannot require the distribution of principal or income from the Trust. A Third Party SNT must be created by a Will. No payback provision is required in a Third Party SNT.

All types of Special Needs Trusts have well-defined rules for creation and administration, therefore, it is very important to seek the advice of an experienced Elder Law attorney to assist in the creation of an SNT.