Special Needs Trust (SNT)

A Special Needs Trust (SNT) has specific language indicating that funds must only be used to ensure the individual’s health and safety and to supplement public benefits.

A SNT that meets the characteristics of an OBRA ‘93 Trust, MQT or Other Trust must be evaluated according to the procedures for that type of trust. There is no special treatment for an SNT.

SNTs established prior to December 31, 2016 are required to be established by the disabled client’s parent, grandparent, legal guardian, court of law, or third party nonprofit organization. SNT’s established January 1, 2017 or later can also be established by the disabled individual or disabled spouse.

ExampleExampleOn 6/21/91, Joseph Jones established an irrevocable Special Needs Trust (SNT) containing $70,500. Joseph is now in a LTC facility. His daughter, Martha Smith, is applying for Medi-Cal for her father. Martha is the trustee and according to the terms of the trust, “the trustee shall pay or apply for the benefit of Joseph Jones for his lifetime, such amount from the principal or income of the trust estate, up to the whole thereof, as the trustee in its sole and absolute discretion may deem necessary or advisable for the satisfaction of Joseph’s special needs”. In addition, the trust states that “no part of the corpus of the trust shall be used to supplant or replace public assistance benefits of any County, State, Federal, or other governmental entity that has a legal responsibility to serve the beneficiary herein.”

IMPORTANT: When reviewing an SNT, disregard the exculpatory language. This trust meets all the conditions of an MQT and is irrevocable. Since the trustee has full discretion in disbursing trust funds, the $70,500 is considered available property and is included in the property reserve.

Special Needs Trust (SNT)

Related Topics