A supplemental needs trust, also known as a special needs trust, is a special type of trust that both provides management of money for the disabled beneficiary, and maintains the beneficiary’s eligibility for government services.
Supplemental needs trusts are an important component of financial planning for an intellectually handicapped child. These trusts allow disabled beneficiaries to receive their inheritance – as well as gifts, lawsuit settlements, or other funds — and not lose their eligibility for certain government programs. Because the beneficiary has no control over the funds in the supplemental needs trust, he or she is not considered to own them. Accordingly, the trust will not affect eligibility for public benefits, such as MassHealth, Supplemental Security Income, and subsidized housing. (Distributions from the trust, however, can sometimes affect continued eligibility, and the trustee needs to be advised on how best to use trust funds for the beneficiary.)
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