What is a special needs trust?

A special needs trust is used to leave property or money to a family member or loved one with a disability in order to ensure he receives Medicaid benefits and Supplemental Security Income. Instead of being left directly to the beneficiary, the money or property is left to the trust.

The trust maker also has to select a trustee who is tasked with overseeing the special needs trust and with spending the money for the beneficiary. The trust ends whenever all of the money in it has been spent, or upon the beneficiary's death. In most cases, a lawyer isn't needed to set up a special needs trust, but one may be necessary if the trust is being created with the beneficiary's personal funds.