Special Needs Trust FAQ

What is a special needs trust?

A special needs trust (sometimes called a Supplemental Needs Trust) is a trust created for the benefit of an individual who receives needs-based public benefits. The purpose of a special needs trust is to maximize available resources without causing the individual to lose eligibility for public benefits.

What benefits are protected with a special needs trust?

Special needs trusts are designed to protect eligibility for needs-based benefits, including Supplemental Security Income (SSI) and Medicaid (called MaineCare in Maine). An individual will only be eligible for these benefits if he or she has limited income and assets.

Why would using a special needs trust to qualify for benefits be more beneficial than just using assets to pay for expenses?

Many resources available through public benefit programs are extremely expensive when paid for privately. Some such resources are practically unavailable except through the public system.

Does having a special needs trust qualify an individual for public benefits?

No. Having a special needs trust does not, on its own, qualify an individual to receive public benefits. The individual must already qualify for the benefit program based on current income and assets, or must qualify after the trust is established.

Who establishes a special needs trust?

There are several kinds of special needs trusts. “Third party” special needs trusts are often established by parents and grandparents for their children or grandchildren who have developmental disabilities or other conditions that qualify them for public benefits.

Is it easy to create a special needs trust?

While the legal theory that allows for special needs trusts is fairly basic, ensuring compliance through the drafting of a special needs trust is quite complicated.

How can special needs trust funds be spent for the individual beneficiary?

The trust should not provide food and shelter. It can provide many other goods and services, such as physical therapy, medical treatment, education, entertainment, travel, companionship, clothing, furniture and furnishings (such as a television or computer), and some utilities (like cable television and a telephone). Generally, the trust can provide anything that the public benefits do not cover.