Should I Have A Special Needs Trust For My Disability Benefits?

If you have recently become disabled and are planning to apply for disability benefits, or if you are currently receiving benefits through the Social Security Disability Insurance (SSDI) program or the Supplemental Security Income (SSI) program, you might be wondering if you need to take any additional steps to preserve your eligibility for Medicaid or other potential benefits. In doing some cursory internet research, you may have come across information about establishing a special needs trust (often known as an SNT) in order to retain any assets you have while maintaining your eligibility for need-based benefits like Medicaid. As such, you may have questions about whether it makes sense for you, based on your circumstances, to set up a special needs trust.

Anyone who is currently applying for or receiving disability benefits should discuss the need for an SNT with an experienced national disability benefits lawyer. While a special needs trust may be able to benefit some disability recipients, it is not necessary for many SSDI beneficiaries.

SSDI is Not a Need-Based Benefit 

If you are receiving SSDI benefits based on your work history and your disabling condition, you may or may not also qualify for SSI benefits, which are need-based. To be clear, SSDI payments are made based on a person having a qualifying disability according to the Social Security Administration (SSA), and having a long enough and substantial enough work history to be eligible to receive SSDI payments. These payments are not based in any way on a person’s need, or a person having low income or limited resources. If you are only eligible for SSDI—and you are not also eligible to receive SSI benefits—then a special needs trust is unlikely to be useful to your situation, or to even be a possibility for you.

In some circumstances, however, a person receiving SSDI benefits can also qualify for and receive SSI benefits. In such cases, a special needs trust may allow that recipient to remain eligible for Medicaid benefits.

If You Qualify for SSDI and SSI, a Special Needs Trust May Be Relevant 

A special needs trust allows for assets to be kept in a special needs trust so that they do not “count” toward a person’s eligibility for need-based benefits like Medicaid. When a person is receiving both SSDI and SSI benefits, a special needs trust may allow that person to place resources into the trust in order to remain eligible for Medicaid benefits. Since the assets in the trust are not owned by the person receiving SSDI and SSI benefits—they are owned by the trust and managed by a trustee—those assets will not be included in calculations pertaining to Medicaid eligibility.

Typically, in order to qualify for a special needs trust, a person must have a disability that meets the SSA’s definition and must meet a number of other requirements depending upon the state where they are created.

Contact a National Disability Benefits Attorney for Assistance 

If you have questions about your disability benefits and special needs trusts, you should seek advice from one of our national disability benefits attorneys to learn more. Contact the Law Offices of Stephen Barszcz for more information.