Frequently Asked Questions (FAQs)
Special Needs Trusts, Supplemental Security Income (SSI),
Medicaid and How They Work Together.

What is SSI?

A Federally-funded needs-based disability program for adults and children which provides monthly cash benefits and, in most states, automatic Medicaid eligibility.

Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues (not Social Security taxes):

It is designed to help aged, blind, and disabled people, who have little or no income; and

It provides cash to meet basic needs for food, clothing, and shelter.

Supplemental Security Income (or SSI) is a monthly stipend provided to the aged (legally deemed to be 65 or older), blind, or disabled based on need, paid by the United States Government.[1] The program is administered by the Social Security Administration, currently (SSA)[2] without using the Social Security trust funds, but the US Treasury general funds.[3] The payments are generally paid on the 1st of the month, for the current month (as opposed to social security benefits which are paid for the prior month).[4] The program was created in 1974 to replace various state-administered programs which served the same purpose, as a way to standardize the variance in the level of benefits[5] through the addition of Title XVI (Title 16) of the Social Security Act.[6]

What is Medicaid?

Medicaid is the US health insurance program for individuals and families with low incomes and resources. It is jointly funded by the states and federal government, and is managed by the states. Among the groups of people served by Medicaid are eligible low-income parents, children, seniors, and people with disabilities. Medicaid is the largest source of funding for medical and health-related services for people with limited income.

A program established by the federal government and administered by the states to help pay medical costs for financially needy people. Need is defined by the program of the state in which the applicant resides. Medicaid operates in addition to Medicare to help pay for some of the medical costs that Medicare does not cover.

What is a Special Needs Trust (SNT)?

The only widely recognized and accepted legal instrument used to leave property (an inheritance) to a loved one with special needs without jeopardizing crucial SSI income and more important Medicaid benefits.

Can I just leave money and property to a trusted son, and let him disburse the funds to his sister with Down Syndrome as she needs them?

You can and as long as everything goes exactly according to plan in your sons life. First, if there is ever a legal judgment against your son, the judgment can attach to the funds and property hes holding for your daughter. Second, if he is ever divorced his ex-spouse might receive part of the funds in the divorce settlement.

In a legal sense, any money you give to your son is his money and vulnerable. A trust is a legal entity in its own right and invulnerable to judgments against your son, although you might consider naming him the trustee.

What control does the settlor have over the disbursements and functioning of a Special Needs Trust?

The settlor has complete control about setting up the provisions of the trust and the instructions to the trustee. However, since a Special Needs Trust is irrevocable, only the trustee or successor trustee controls the trust.

What control does the trustee have over the disbursements and functioning of a Special Needs Trust?

The trustee cannot break the law but otherwise the trustee has nearly complete control of the trust within the guidelines of the trust as set up by the settlor.

What control does the disabled person as beneficiary have over the disbursements and functioning of a Special Needs Trust?

The beneficiary of a Special Needs Trust has no control over the trust or the actions of the trustee. The SNT is a separate legal entity from the beneficiary. This is why the funds in an SNT are not considered an assets by SSI and Medicaid until they are disbursed by the trustee.