Supplemental Needs Trust Law and Legal Definition

A supplemental needs trust is a financial tool used to allow a person such as a family member may establish a trust for a disabled individual without jeopardizing the beneficiary's eligibility for Medicaid and other government benefits. It can take the form of a supplemental trust for a disabled person is established with the funds of the disabled person or the disabled person's spouse. It can also be established as a "third-party" trust, with the funds of someone other than the disabled person, or the disabled person's spouse, or someone legally responsible for the expenses of care for the disabled person. The types of trusts that do not disqualify the applicant from benefits can be found at 42 U.S.C. § 1396p(d)(4)(A).

A special needs trust is also called a special needs trust. Such trusts are often created to collect inheritance or personal injury litigation proceeds on behalf of a disabled person in order to allow the person to qualify for Medicaid benefits.