What is a special needs trust and why is it important?

A special needs trust holds assets for a disabled beneficiary without disqualifying them from means-tested government benefits like Medicaid and Supplemental Security Income (SSI). These programs cap how much a recipient can own, so a direct inheritance or gift can accidentally cut off vital benefits. A properly drafted special needs trust lets the funds pay for extras that improve quality of life – therapy, education, travel, technology – while the trustee, not the beneficiary, controls the money so it doesn't count as the beneficiary's resource. There are third-party trusts (funded by parents or relatives) and first-party trusts (funded with the beneficiary's own money, which carry a Medicaid payback rule). This is specialized work; the language must be exact, so use an attorney experienced in disability planning rather than a generic template. See wealthserene.com/goals/protect-your-family.