What is a Supplemental Needs Trusts?
As its name implies, supplemental needs trusts are designed not to provide basic support, but instead to pay for comforts and luxuries that are not available from public assistance. Supplemental needs trusts (also known as “special needs” trusts) allow a disabled beneficiary to receive gifts, lawsuit settlements, or other funds and yet not lose eligibility for certain government programs. Such trusts are drafted so that the funds will not be considered to belong to the beneficiary in determining eligibility for public benefits. These trusts typically pay for things like counseling, physical therapy, education, recreation, and medical needs beyond the simple necessities of life. However, the trustee can use trust funds for necessities such as food, clothing and shelter if the trustee decides doing so is in the beneficiary’s best interest despite a possible loss or reduction in public assistance. Very often, supplemental needs trusts are created by a parent for a disabled child (even tho
