The number of people in the United States with special needs has grown significantly in recent decades as a result of technology and medical advances. This increase has created concerns for the care for the members of this population.

The government has responded to the growing special needs community through legislation and benefits programs. There are several government programs designed to benefit individuals with special needs, including Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), Medicaid, and Medicare.

These benefit programs are imperative for many individuals with special needs, because the cost of care is extremely expensive. Many parents and relatives of individuals with special needs who receive government benefits often want to provide additional care but do not want to disrupt the benefits.

It is important to understand that there are options that will help provide funds for the care of an individual with special needs while maintaining government benefits. The following is a brief explanation of a few of these options:

Special Needs Trusts – The Special Needs Trust, which is also referred to as a “Disability Trust,” or a “Payback Trust,” is available only to individuals who are under the age of 65 and disabled. This kind of trust must be funded with the assets of the individual who is disabled and must be created for his or her benefit by the court, a parent, grandparent, or legal guardian of the individual. This type of trust must include a “payback” provision that repays the state Medicaid agency upon the death of the beneficiary for the cost of Medicaid benefits received by the beneficiary. Additionally, a Special Needs Trust must be for the sole benefit of the person with disabilities during his or her lifetime.

Third-Party Supplemental Needs Trusts – This type of trust is designed to supplement (not supplant) Medicaid/SSI benefits for a beneficiary. Hence, the trust assets and income can be used to maximize the beneficiary’s quality of life. A party other than the beneficiary must create the trust (typically, a parent). This type of trust is usually funded with the assets of a relative of the beneficiary with special needs and the trust should not be funded with the assets of the beneficiary. There is no Medicaid payback in a properly drafted Third-Party Supplemental Needs Trust. This is the most protective trust used by parents of a child with special needs.

Pooled Trusts – This type of trust pools the resources of many beneficiaries into a single Trust for investment purposes, and is managed by a nonprofit association. Pooled Trusts, which provide a separate account for each beneficiary, are only available to individuals who are disabled and under the age of 65. The Trust account may be created by a third party, a court, or by the disabled beneficiary himself. Upon the death of the disabled beneficiary, the balance remaining in his or her separate account is either retained in the Trust for the nonprofit association or paid back to the state Medicaid agency to reimburse the cost of medical assistance to the beneficiary during his or her life. Pooled Trusts are available to residents in every state. One option to residents of New York is the Theresa Pooled Trust.