How Can a Special Needs Trust Protect My Eligibility for Medicaid?

Supplemental or Special Needs Trusts (SNTs) are legal tools that individuals can utilize to protect their ability to receive New York Medicaid and Supplemental Security Income (SSI) benefits. Originally, SNTs were set up to allow parents of children with developmental disabilities to provide financial assistance for them as they grow up without negating their ability to receive public benefits. SNTs are structured in a way that they supplement the disabled individual’s public benefits, rather than replace them.

According to NY Health Access, SNTs may also be utilized to protect eligibility for Medicaid benefits. A disabled Medicaid recipient may be able to use a SNT to keep the majority of their income, rather than having to pay a portion of their finances toward funding the cost of care, such as home care services. An individual can also place their income into an SNT to help them qualify for a Medicare Savings Program.

Ordinarily, when an individual under the age of 65 may receives a lump sum, such as in instances where he or she may be rewarded a retroactive Social Security award or personal injury settlement, this asset would disqualify the individual’s eligibility for New York Medicaid and SSI benefits. However, an individual may transfer the lump sum into a SNT to remain eligible for all public benefits and may utilize the funds in the SNT to supplement their regular income for years to come.

The individual, or beneficiary, can designate a trusted family member or friend to serve as the trustee, someone who will have discretion over the property within the trust and will be in charge of designating funds on the individual’s behalf. Due to the fact the SNT is under the control of the trustee, SSI and Medicaid administrators will not take the trust property into account for eligibility when considering Medicaid and SSI benefits. The trust will end when there is no longer a need for it — usually, at the death of the beneficiary or when the funds of the trust runs out.

P&P Medicaid specializes in creating Special Needs Trusts and Pooled Income Trusts to allow you to be eligible for Medicaid benefits by lowering your monthly income overage. For more information about how Supplemental or Special Needs Trusts may help you or your loved one, or to learn more about any of our additional services, contact our Long Island office at 516-541-4770.

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