Planning for People with Special Needs

You may wish to set aside money for a disabled relative or friend, but may be afraid to do so for fear of disqualifying that person from certain government benefits, such as Supplemental Security Income (SSI) or Medical Assistance (Medicaid.) The law permits you to place the money in a carefully drafted trust for the benefit of a disabled beneficiary, and specify that the funds are to supplement, and not supplant that individual’s public benefits.

You would designate a trustee (a capable individual or trust company) to invest and safeguard the funds. This approach enables your disabled beneficiary to receive distributions from the trust while maintaining eligibility for means-tested public benefits.