A Third-Party Special Needs Trust (SNT) is an essential planning tool for families who want to provide long-term financial support for a loved one with disabilities—without putting their government benefits at risk. This type of trust is funded by someone other than the beneficiary—typically a parent, grandparent, or guardian—and is specifically designed to supplement (not replace) public benefits like SSI and Medicaid. Because the trust holds the assets instead of the individual, it protects eligibility while allowing for enhanced quality of life through access to additional resources like housing, therapy, education, and personal care. When paired with a life insurance policy, the death benefit can be directed into the trust, creating a tax-free, lasting financial foundation that supports your loved one for years to come.

• Protects Eligibility for Government Benefits

  A key reason to use a Third-Party Special Needs Trust is to preserve your loved one’s access to essential government programs like Supplemental Security Income (SSI) and Medicaid.

  These programs have strict income and asset limits, and receiving a direct inheritance or large lump sum—such as a life insurance payout—can unintentionally disqualify someone from the benefits they rely on. By placing assets in a properly structured third-party trust, the individual can still benefit from those funds without technically owning them, keeping their public assistance intact while enhancing their quality of life.

• Flexible Financial Support for a Better Quality of Life

  A Third-Party Special Needs Trust offers broad flexibility in how funds can be used—allowing families to support their loved one’s unique needs without disrupting government benefits.

  While programs like SSI cover only basic necessities such as food and housing, trust funds can be used for a wide range of supplemental expenses, including:

  • Medical and dental care not covered by insurance

  • Education and tutoring

  • Personal caregivers or companions

  • Recreational activities, vacations, and hobbies

  • Assistive technology and home modifications

  • Transportation and mobility aids

  This flexibility ensures that your loved one can enjoy a richer, more comfortable life—without losing access to the vital benefits they depend on.

• Avoids Disruptions in Care

  Without proper planning, an inheritance or large financial gift left directly to a disabled individual can result in loss of government benefits, mismanagement of funds, or rapid depletion of resources—all of which can seriously disrupt their care and stability.

  A Third-Party Special Needs Trust prevents these issues by placing assets under the care of a designated trustee, who manages the funds and ensures they are used in the best interest of the beneficiary. This structure provides continuity, oversight, and accountability, helping maintain the individual’s care, comfort, and well-being—now and in the future.

• Preserves Family Wealth for Future Generations

  A Third-Party Special Needs Trust not only protects your loved one—it also safeguards your family’s legacy. By directing assets to the trust instead of the individual, parents and relatives can ensure those funds are protected from government recovery programs, mismanagement, or unintended loss.

  This approach creates a stable financial environment for the beneficiary while shielding the family’s estate from being drained by long-term care or medical expenses. It’s a thoughtful way to provide support today while preserving wealth for future generations.

• Tailored to Your Family’s Wishes

  One of the key advantages of a Third-Party Special Needs Trust is the ability to customize it to reflect your family’s values and intentions. The grantor—the person who creates the trust—can outline specific instructions on how the funds should be used to support the beneficiary’s quality of life.

  The appointed trustee is legally bound to follow these guidelines, ensuring that your wishes are carried out exactly as intended. This level of control provides peace of mind and reinforces your role in shaping your loved one’s future—even after you’re gone.

• Reduces the Risk of Family Conflict

  Establishing a Third-Party Special Needs Trust helps minimize potential disputes among family members by creating a clear, legally guided framework for managing the beneficiary’s care and finances. With a designated trustee overseeing all distributions, decisions are made objectively and in accordance with the grantor’s instructions—not based on emotion or differing opinions.

  This structure promotes transparency, fairness, and peace of mind, helping families stay united while ensuring the beneficiary’s needs remain the top priority.