Special Needs Plan

Q. What is a Special Needs Plan and why do I need one?

A. A Special Needs Plan is needed when a family member or child is disabled and may need to qualify for government provided disability services. Special Needs Planning is not just drafting a Special Needs Trust – it also involves preparing all the family estate-planning instruments; advance directives; wills and trusts; letters of intent; Trustee instructions; transition planning; etc., that a disabled individual, or family of a disabled adult or child, will need to ensure either their own or their family member’s quality of life into the future while still preserving eligibility for much-needed government services.

While those instruments provide the basis for the Special Needs Plan, to be truly effective, the plan must address and resolve the important issues being faced by the disabled individual and their family / caregivers, such as, “if the parents pass away, or must go into nursing home care, what will happen to their disabled child?”; “how well does the disabled individual cope with change?”; “Who will step in to care for the disabled child / adult?”

All these questions and many more are answered by comprehensive special needs plans, such as those that are developed by Carol Johnson Law Firm, P.A., on behalf of the parents / caregivers and / or the disabled individual. All special needs planning is specifically designed for the individual client and is primarily focused on maintaining the future well-being and quality of life for the disabled individual when their current living situation inevitably changes.

Proper planning for the future needs of a disabled individual requires an in-depth knowledge and fundamental understanding of ever-changing federal and state laws that define how and when a person is eligible for government disability benefits and the legal instruments (special needs trusts, ABLE accounts) that, properly drafted, are exempt from being considered, by the Social Security Administration (SSA), as an income / asset resource. These exempt trusts allow individuals to qualify for government means-tested programs so long as they are drafted and administered in strict accordance with the federal and state rules that define them.

There are three main trusts that have been defined as “exempt” by the SSA, including two defined within the Omnibus Budget Reconciliation Act of 1993 (OBRA ’93). These two OBRA trusts are the “self-settled Trust” and the “Pooled Trust”, a third type of trust is a “Supplemental Needs Trust” also frequently called a “third-party Trust” because it is created by a third-party for the benefit of the disabled individual. Case law has shown that Trusts which fail to meet all specific requirements, as defined by the SSA, are deemed to be resources available to the disabled individual, thus making the disabled individual ineligible for the benefits on which they rely. A description of these three main exempt trusts follows;


It is worth noting that even within the above-described trusts there are variations of them that can be used and additional types of trusts, such as a Qualified Income Trust and ABLE accounts that are available for special needs persons who prefer to, and can, continue to work while maintaining their Medicaid long-term care eligibility. An in-depth analysis of all available trust instruments is not the focus of this article, but can be discussed in greater depth during a personal consultation.