What is a special needs trust and who is eligible to set one up?

A special needs trust is a legal tool used in elder law for individuals with special needs who are eligible for government-sponsored programs, such as Medicaid and Supplemental Security Income (SSI). Also known as supplemental needs trusts, these trusts are especially beneficial for individuals with disabilities because they allow for the disabled person to maintain their eligibility for benefits while allowing them to benefit from extra money and gifts from friends and family. The person creating a special needs trust is typically known as the grantor and the individual receiving the trust funds is known as the beneficiary. A grantor must be 18 years of age or older, and have legal capacity to create the trust. In Washington, an individual who is eligible to create a special needs trust is usually the parent, grandparent, legal guardian, or a court-appointed trustee. Special needs trusts can also be set up through a will upon the death of the grantor. A trust document, managed by a trustee, describes the purpose of the trust, who the beneficiaries are, and how the trust exists. Generally, the trust funds are used for non-essential needs, such as recreational activities and holidays, rather than necessary needs such as food, clothing and shelter, as those are met through public benefits. It is important to note, however, that a special needs trust must be set up carefully in order to be effective. Washington state has some specific requirements that must be followed in order to be eligible for the trust and maintain government benefits. As such, it is strongly recommended that one consults with an experienced elder law attorney before creating a special needs trust.

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What is a special needs trust and who is eligible to set one up?

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