Special Needs Trusts

Special Needs Trusts

Special Needs Trusts are irrevocable trusts with specific provisions designed for beneficiaries in need of public assistance. The purpose of a special needs trust is to provide the beneficiary with more than what public assistance provides, without disqualifying the beneficiary from receiving public assistance in the process. To do so, the beneficiary must have no control over the trust assets, and the distribution provisions in the trust must be limited.

In situations when a person with special needs has or receives assets that will disqualify them from public assistance, these assets may be placed into a self settled "OBRA" (aka Payback) trust, a special needs trust that �pays back� whatever assets remain at the termination of the trust to the government agency providing the assistance. Using this procedure will prevent the government from taking the trust assets or disqualifying the beneficiary from public assistance.

If you intend to leave assets to a person with special needs or receiving public assistance, care should be taken to make sure the gift does not affect any benefits the donee is receiving.