Who Qualifies for a Special Needs Trust?
Understanding special needs trust eligibility helps you decide if this planning tool fits your family. A special needs trust protects access to SSI and Medicaid while still providing financial support. When you match your loved one’s disability, benefits, and long-term needs with the right trust, you give them stability without risking essential programs.
Disability Requirements for Special Needs Trust Eligibility
Most families look first at disability status. Special needs trusts usually serve people with physical, developmental, or mental disabilities that limit daily functioning or require ongoing care. Many parents use the Social Security Administration’s criteria as a guide, since SSI and Social Security Disability Insurance rely on clear disability definitions. You can review current SSI rules at ssa.gov/ssi/eligibility.
Because SSI and Medicaid have strict income and resource limits, special needs trust eligibility also depends on financial status. If your loved one owns or will receive assets in their own name, those funds can exceed program limits. A properly drafted trust holds assets outside their direct control so benefits remain protected.
Who Benefits Most From a Special Needs Trust
A special needs trust works best for someone who relies on, or is likely to rely on, means-tested benefits like SSI or Medicaid. If you expect your child or family member will always need subsidized health coverage, daily support, or residential services, special needs trust eligibility becomes especially important. Instead of leaving money directly to them, you route support through the trust.
Medicaid rules also matter, since many people with disabilities depend on Medicaid for healthcare coverage. You can review federal Medicaid eligibility guidelines at medicaid.gov.
First-Party vs. Third-Party SNT Eligibility
Eligibility also depends on how the trust will be funded. A first-party special needs trust uses the beneficiary’s own assets, such as an inheritance or legal settlement. Federal law requires a Medicaid payback clause and sets specific drafting requirements, so families should work with a special needs planning attorney.
By contrast, a third-party special needs trust holds assets that belong to someone else—often parents or grandparents. These trusts do not require Medicaid payback and offer more flexibility. Many families use third-party trusts as part of a larger estate plan that may also include revocable living trusts, wills, and life insurance. You can learn more at the Special Needs Trusts page on our website.
Questions to Decide on Special Needs Trust Eligibility
To decide whether a special needs trust fits your situation, start with a few key questions:
- Will your loved one’s long-term needs exceed what SSI or Medicaid cover?
- Would receiving assets directly put benefits at risk?
- Does your family want structured, long-term financial support?
- Do you want clearer oversight for future caregivers?
Why Eligibility Rules Matter
Eligibility rules affect whether a special needs trust actually protects benefits. Agencies review trust language, funding sources, and distribution patterns closely. If the trust is drafted incorrectly or used like a regular spending account, it can be treated as a countable asset. This may reduce SSI payments or cause a loss of Medicaid coverage.
Families often review long-term planning resources such as The Arc’s planning guidance at thearcca.org/info-resources/future-planning while preparing for next steps.
Talk With a Special Needs Planning Attorney
Special needs trust eligibility is only the first step. You still need to choose the right trust type, coordinate beneficiary designations, and align your full estate plan. At Metropolitan Law Group, our attorneys help families in Arizona, Minnesota, and Wisconsin protect benefits and improve long-term stability.
If you believe a special needs trust may be right for your loved one, book a complimentary 15-minute Discovery Call with an experienced team member. These calls are handled by trained staff, not attorneys, so you can ask questions and outline your goals comfortably. You can also call 480-409-8200 in Arizona or 612-524-9414 in Minnesota and Wisconsin to get started.
