If you have a child or family member with a disability, a traditional inheritance could do more harm than good. Government benefits like Medicaid and SSI are based on financial need—and receiving assets outright may disqualify your loved one from the support they depend on.
That’s where a Special Needs Trust (SNT) comes in.
What Is a Special Needs Trust?
A Special Needs Trust allows you to set aside funds for a person with a disability without affecting their eligibility for government programs. The trust is managed by a trustee, who uses the funds to supplement—not replace—public benefits.
Covered expenses can include:
- Medical care not covered by Medicaid
- Therapy and assistive technology
- Transportation and personal care
- Education, recreation, and travel
Types of Special Needs Trusts
- Third-Party SNT – Funded by parents or others. Most common in estate plans. No Medicaid payback.
- First-Party SNT – Funded with the beneficiary’s own assets (like a lawsuit settlement). Medicaid must be repaid after death.
- Pooled SNT – Managed by a nonprofit. Ideal when no suitable individual trustee is available.
Why Proper Planning Matters
SNTs must follow strict federal and Louisiana Medicaid rules. If drafted incorrectly, the trust could be considered a countable asset—putting benefits at risk.
Avoid common pitfalls like:
- Distributions made directly to the beneficiary
- Missing language about discretionary spending
- Using a generic online form
Choosing a Trustee
You can name a trusted family member, a professional fiduciary, or both. The trustee must understand their responsibilities and act in the beneficiary’s best interest.
Without an SNT, Your Loved One Could Lose:
- SSI or Medicaid eligibility
- Financial stability
- Access to needed care
- Long-term protection
Plan With Confidence
At Oak Grove Estate Planning, we help Louisiana families protect their loved ones with disabilities through carefully crafted, legally compliant Special Needs Trusts. We’ll walk you through the process and help you build a plan that supports your family—now and in the future.
Schedule your consultation today to get started.
