Supplemental/Special Needs Trust

A supplemental/special needs trust (also known as an “SNT”) creates a fund to help a person suffering from a severe and chronic disability when the creator of the SNT may not be around to see that the money is well spent for the intended beneficiary. The SNT pays for the unique, long-term needs of the beneficiary and is meant to give the disabled person the best quality of life possible, without giving the disabled person so much money that the disabled person becomes ineligible for government assistance. SNTs are often created within wills to become effective on the death of the donor.

All of the requirements for making a valid trust in New York apply to SNTs. In addition, the trust documents must have specific provisions required by New York State law. If precisely written to conform to New York State law, the assets of the trust are not counted when the government determines eligibility for government benefits or assistance. The SNT usually allows payments to supplement government benefits, like Medicaid, so long as those payments do not make the beneficiary ineligible for those benefits.

Any person may create an SNT for the benefit of any disabled person whether related to them or not. The most common creators of SNTs are parents of disabled children, but it can be anyone such as a grandparent or other relative or sympathetic neighbor. SNTs are necessarily irrevocable in order for the government to exclude that income when determining eligibility for benefits.

A disabled person with assets may also create an SNT for their own benefit, but any assets left when that person dies must be used to pay back the government for any public benefits they received.

Legal Editor: David Caraway, April 2015 (updated August 2020)