Protecting a loved one’s benefits and quality of life
Special Needs Trusts
A special needs trust is designed to provide financial support for a person with a disability without jeopardizing their eligibility for means-tested government benefits1 such as Supplemental Security Income (SSI) or Medicaid. For many families, this type of trust is the only way to leave meaningful resources to a loved one with special care needs while keeping essential benefits intact.
Questions Families Ask About Special Needs Trusts
Will a direct inheritance disqualify my loved one from benefits?
It can. Receiving assets outright, whether through a will, life insurance, or other means, may push a beneficiary over the resource limits for SSI1, Medicaid, or other programs. A properly structured special needs trust avoids that problem.
Who manages the trust?
A trustee you select manages the trust. The trustee must understand the rules governing supplemental spending and benefit preservation. We help families choose a trustee and set clear terms for how the trust operates.
Is there more than one kind of special needs trust?
Yes. A first-party trust holds the beneficiary’s own assets, often from a settlement or inheritance, and carries Medicaid payback rules. A third-party trust holds assets that come from family, such as a parent’s estate plan, and does not. Pooled trusts, run by nonprofits, are another option. The right structure depends on whose money funds the trust.
How a Special Needs Trust Works
The trust holds the assets
The trust holds assets for the beneficiary’s benefit, but the beneficiary does not own or directly control the funds.
The trustee makes supplemental distributions
The trustee makes distributions for supplemental needs, things that improve the beneficiary’s quality of life beyond what government benefits provide.
Benefits eligibility stays central
The structure and the trustee’s instructions are designed to preserve the eligibility rules that matter most for SSI, Medicaid, and similar programs.
What a Special Needs Trust Can Pay For
Care and comfort
Therapies, equipment, and services that public benefits do not cover.
Daily life
Education, transportation, technology, and personal enrichment that improve quality of life.
Independence
Supports that help the beneficiary live as fully and independently as possible.
Types of Special Needs Trusts
First-party
Funded with the beneficiary’s own assets. Subject to Medicaid payback at death.
Third-party
Funded by family or others. No payback, and any remainder can pass to other loved ones.
Pooled
Administered by a nonprofit that pools and invests funds while keeping separate accounts.
How We Help
We work with families to design special needs trusts that reflect the beneficiary’s actual needs, coordinate with their benefits, and provide clear guidance to the trustee on how to manage the trust properly. We also make sure the trust fits within the family’s broader estate plan.
Free Client Worksheet
Special Needs Trust Family Worksheet
Gather what the attorney needs to design a special needs trust around your loved one.
Related Pages
References & Sources
- Social Security Administration, Supplemental Security Income (SSI) (means-tested program with strict resource limits). www.ssa.gov
- Tex. Est. Code §§ 751.001, 752.051 (Durable Power of Attorney Act; statutory durable power of attorney form). statutes.capitol.texas.gov
- Texas Law Help, “Wills, Estate Planning and Probate.” texaslawhelp.org
- Texas State Law Library, Wills & Directives research guide. guides.sll.texas.gov
- Texas Disciplinary Rules of Professional Conduct, Part VII (Rules 7.01–7.06). www.texasbar.com
Attorney Advertising. This page is general information, not legal advice, and does not create an attorney-client relationship. Texas estate and probate law is fact-specific; prior results do not guarantee a similar outcome. Communications about a lawyer’s services are governed by the Texas Disciplinary Rules of Professional Conduct, Part VII.