What is special needs planning, and what options can help people with disabilities?Read more
Government programs like Medicaid and Supplemental Security Income (SSI) provide essentials, such as medical care, food, clothing and shelter. Special needs trusts are designed to supplement, not replace, this kind of basic support. Such trusts pay for anything the trust document provides for, including comforts and luxuries that meager public assistance funds don't cover.
What are these "special needs"? A special needs trust has been likened to a "parent's pocket" - that is, it pays for the kinds of things that a parent would just reach into his or her pocket to cover.
These trusts typically pay for things like education, recreation, counseling, and medical attention beyond the simple necessities of life. (However, the trustee can use trust funds for 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.)
Here are some examples of expenses that a special needs trust might cover: