Practice Areas

Supplemental Needs Trusts

Ensuring the Continuity of Public Benefits

Supplemental needs trusts are designed to supplement the public benefits, namely Medicaid, Supplemental Security Income (SSI), and Section 8 Housing, received by disabled adults. Public benefits typically provide only for a disabled person’s minimum necessities. A properly drafted supplemental needs trust can greatly increase and enhance the quality of life of an individual with a disability and limited resources.

Public Benefit Requirements and Limitations

Eligibility for public assistance programs generally requires that an individual be disabled as defined by the Social Security Administration and have very limited resources: usually less than $2,000. If an individual who receives public benefits holds resources in excess of $2,000, their eligibility for public benefits may be jeopardized.

A properly drafted supplemental needs trust allows a disabled individual to receive the benefit of the trust assets that would supplement and not supplant public benefits, such that he or she can continue to be eligible for public benefits. At EDLC, our lawyers work with families to both maximize a loved one’s public benefits, such as Medicaid and SSI, to ensure that the individual also receives the maximum benefits from a supplemental needs trust. We assist trustees in the administration of the supplemental trust, and we often serve as trustee for clients who desire our assistance.

What a Supplemental Needs Trust Can Do

A disabled individual can keep their resources over $2,000 if placed in a Supplemental Needs Trust. The trust can pay for supplemental care that is not provided by public benefits such as housekeeping; telephone service; personal items; entertainment; personal services; repairs and maintenance; disability/geriatric case management evaluation and services; luxuries; training; education; outings; vacations; fuel; travel and transportation; vehicles; costs to make vehicles and facilities accessible; companion services expenditures so that family and friends can visit; funeral and burial; dental care; and speech, physical and other therapies.

A supplemental needs trust is administered by a trustee. At EDLC, we specialize in assisting families in setting the goals of a supplemental needs trust, selecting the type of trust, drafting the trust, providing guidance and directions to the trustee and administering the trust.

Types of Supplemental Needs Trusts

There are different types of supplemental needs trusts. The two main types are a trust created with resources of the disabled individual generally known as a (d)(4)(A) supplemental needs trust and a supplemental needs trust created with a third-party’s money, usually from a parent’s, child’s, or grandparent’s resources. A third-party created trust is usually called a (c)(2)(B) supplemental needs trust.

In order to best understand the distinctions, requirements, and limitations, one should consult with an experienced Elder Law attorney. At EDLC, we can provide you with guidance to navigating through this complicated field. To schedule a consultation regarding a supplemental needs trust for your child or adult relative with a disability, contact us.

A pooled supplemental needs trust can also be utilized for a disabled individual’s resources. A pooled trust is generally established and run by a non-profit organization dedicated to serving the disabled community. The pooled trust combines the resources of disabled individuals for ease of management and administration of funds. The disabled individual has a separate account, but the assets are combined and invested together. The investment trustee is usually a bank or financial institution and there is a master trust agreement. Each individual, or his/her guardian or parent, signs a joinder agreement to join the trust.

Selecting the appropriate type of supplemental needs trust, as well as understanding the administrative and reporting requirements can be a daunting task. On the other hand, it is a very effective tool for enhancing the life of an individual with a disability. Contact EDLC for either a one-time consultation or comprehensive representation to help you establish a supplemental needs trust.