As adults, many individuals with significant special needs obtain basic support from Supplemental Security Income (SSI), which also is the gateway to Medicaid and other critical programs. Since SSI covers only essential expenses, most parents want to supplement their child’s lifestyle. But because SSI imposes limits on income and assets, providing funds to the child directly can jeopardize benefits eligibility. Generally, the best solution is placing funds in an SNT. The Social Security Administration (SSA) does not count assets in an SNT as income for determining benefits eligibility because the assets are owned by the trust rather than the child beneficiary.
If you establish the trust now, grandparents and others interested in helping your child can make annual gifts to the SNT of up to $15,000 ($30,000 for a married couple) without triggering the gift tax or generation-skipping tax. Anyone interested in leaving their child money should be advised to direct bequests to the SNT.