Needs-based public assistance programs like Medicaid and SSI have very strict income and resource requirements. Exceed those limits, and benefits will be terminated until the money is spent. For someone who is disabled, an outright inheritance or settlement from a lawsuit would cause them to immediately lose those benefits.
A properly drafted special needs trust, however, maintains the beneficiary’s eligibility for these programs while still allowing them to benefit from the trust’s assets. The trust owns the assets, so they aren’t considered the beneficiary’s income or resources. However, the trustees (the person or persons who administer the trust) make distributions on the beneficiary’s behalf, so they still indirectly benefit from the assets.