Special needs trusts cover supplemental needs for which Security Supplemental Income (SSI) and Medicaid are insufficient. Such trusts are typically set up by families to support a member with a disability that makes them eligible for government benefits. With the state and federal government only providing health care support up to minimum “essential needs” levels, the advantage is that funds can be contributed while maintaining SSI and Medicaid eligibility.
One major decision is the amount of money put into the special needs trust, which depends on the specific disability involved and level of care necessary, and can be funded by inheritances, family assets, life insurance policies, and court awards. The special needs trust does have significant setup and management expenses, and for this reason, some recommend a baseline of $100,000 when setting up such an account.