A special needs trust avoids the demands of benefits programs by distributing its assets on behalf of the disabled beneficiary only to pay for care and services that are not provided by public benefit programs. For example, a special needs trust could pay for dental services or therapy sessions that are not covered by Medicaid. A special needs trust could pay for educational services that are not covered by the state's vocational rehabilitation program. However, a special needs trust would not pay for medications that are already provided by Medicaid. The trust can be set up while the generous friend or family member is living, or it can be set up through their will.
Life insurance is a common way to fund special needs trusts.
If you wish to set up a special needs trust to benefit a disabled person, you should contact an expert in estate planning. Estate planning is a tricky business, do not rely on your friend or your neighbor to write up a special needs trust. In April 2000, the United States Supreme Court issued a decision stating that it was now prepared to decide whether the ADA applies to state programs and services. The case is called Garrett v. University of Alabama . Patricia Garrett, a university employee with 18 years seniority who did consistently excellent work throughout her career was fired shortly after she began treatment for breast cancer.