A Supplemental Needs Trust (“SNT”) is a trust that is typically created to provide a protected fund for persons who receive benefits from governmental sources. Ordinarily, if an individual is the recipient of benefits from Medicaid or social security disability or other governmental programs, the receipt of private funds by such individual would disqualify them from obtaining future benefits. The private monies would either need to be paid to the government as repayment for past benefits or spent down before government subsidies could resume. The SNT allows a person to have the best of both worlds. Funds can be held in a SNT while the government benefits continue to be paid.
A SNT can be created and utilized in many different situations. For example, in estate planning, where a parent has a child or potential beneficiary that is a recipient of benefits such as Medicaid, a SNT can be established as a provision in a Last Will or Living Trust to provide a source of extra financial benefit for such person without risking any loss of benefits. New York Estates, Powers and Trusts Law Section 7-1.12 entitled “Supplemental needs trusts established for persons with severe and chronic or persistent disabilities” provides the requirements for the creation of such trusts. Continue reading →