Special Needs Trust Overview
What is a Special Needs Trust?
A Special Needs Trust (SNT) is a legal structure designed to hold assets for an individual
with a disability while preserving eligibility for government benefits such as Supplemental
Security Income (SSI) and Medicaid.
Why Use a Special Needs Trust?
• Protect eligibility for SSI and Medicaid
• Provide financial support for quality of life
• Manage and control distributions responsibly
• Preserve long-term financial security
Types of Special Needs Trusts
Third-Party Special Needs Trust
• Funded by parents, grandparents, or others
• Used for estate planning
• No Medicaid payback required
First-Party Special Needs Trust
• Funded with the beneficiary’s own assets
• Often used for settlements or inheritances
• Medicaid payback required at death
Pooled Trust
• Managed by a nonprofit organization
• Suitable for smaller accounts
• Professional management provided
What Can the Trust Pay For?
• Medical and dental care
• Education and training
• Transportation
• Therapy and support services
• Personal care and quality-of-life expenses
Important Considerations
• Distributions for food or housing may reduce SSI benefits
• Trustee selection is critical
• Legal setup is required
• Must follow strict compliance rules
ABLE Account vs Special Needs Trust
ABLE Account:
• Easier to set up
• Annual contribution limits
• Best for day-to-day expenses
SNT:
• No contribution limits
• Long-term planning tool
• Greater control and protection
Summary
A Special Needs Trust is a powerful planning tool that allows families to provide financial
support while protecting essential government benefits. When used alongside an ABLE
account, it creates a comprehensive strategy for both long-term security and daily financial
needs.
Sources & References
This summary is based on guidance from the following authoritative sources:
Internal Revenue Service — Achieving a Better Life Experience (ABLE) Accounts
(Section 529A)
https://www.irs.gov/taxtopics/tc311
Social Security Administration — SSI Spotlight on ABLE Accounts
https://www.ssa.gov/ssi/spotlights/spot-able.html
Social Security Administration — Program Operations Manual System (POMS):
ABLE Accounts
https://secure.ssa.gov/poms.nsf/lnx/0501130740
ABLE National Resource Center — ABLE Accounts Overview & Best Practices
Texas Comptroller of Public Accounts — Texas ABLE® Program
Special Needs Alliance — Special Needs Trust Planning Resources
https://www.specialneedsalliance.org
National Academy of Elder Law Attorneys — Special Needs Planning Resources
Important Disclosure
This material is provided for informational purposes only and should not be construed as legal, tax, or investment advice. Special
Needs Trusts involve complex legal and regulatory considerations. You should consult with a qualified attorney and tax
professional regarding your specific situation.
This summary is being provided as a service to you by Patron Partners. In preparing this report, Patron Partners has
relied upon information provided by the account custodian. You should be receiving statements at least quarterly from
your custodian. If you are not receiving these statements, or you need another copy, please call us and we will provide
one to you. We encourage you to compare the information on the reports prepared by us against the information in the
statement(s) provided directly from your account custodian and to alert us of any discrepancies. Please remember to
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