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Supplemental Needs Trusts Under Florida Law


Being disabled in the United States can be difficult, particularly financially. Families with disabled children often wind up between the proverbial rock and a hard place in terms of providing for them in the long-term, especially if the disabled person receives Supplemental Security Income (SSI) – SSI imposes a $2,000 asset limit on every recipient, which means that giving your child too much money or too many assets might trigger a loss of their benefits. Thankfully, there are provisions in estate planning law which create a potential avenue to provide for disabled children without putting public benefits at risk – they are known as supplemental needs trusts or special needs trusts.

Asset & Benefit Limits Are Strict

Too often, parents or other relatives who want to provide for a disabled child or grandchild may simply choose to give them money or assets, or to will them directly to the disabled person. Both of those approaches, however, will immediately jeopardize public benefits like SSI and Medicaid, because the disabled person will suddenly have assets over the $2,000 limit. However, supplemental needs trusts (SNTs) are designed to hold assets or income in trust for the disabled person. This allows those assets to be held for the disabled person’s benefit, without actually placing them in their name and risking benefit loss. State law defines a SNT as one where the authorized trustee “believes would not be considered a resource” in determining government benefit eligibility.

Florida law recognizes two types of supplemental needs trusts. One is referred to as a self-settled or first-party trust, and is most often used with disabled people when they suddenly come into a large sum of money (for example, if they receive a jury award in a personal injury case). A third-party SNT is much more common, created by third parties who intend to stock the trust with assets – most often, family members of the intended beneficiary. Third party SNTs can be revocable living trusts, or can be created with the funds from a portion of your estate upon your passing.

Rules For Third-Party SNTs

If you choose to create a third-party trust, it is crucial that you do so while explicitly stating that your intent is to provide for the disabled child without endangering their benefit eligibility. Generally, as long as the disabled beneficiary may not demand access to the assets or the trust income, it should be considered exempt for the purposes of SSI and Medicaid – but this does illustrate that a SNT must be drafted very carefully, given the number of little details which can affect the entire endeavor.

Keep in mind that if your disabled child receives Medicaid, it is also important to keep in mind that a SNT cannot duplicate any needs assistance provided by Medicaid. It must instead supplement Medicaid benefits and cover needs that would not be met by the program – examples might include housekeeping or cooking help, repairing or replacing electronics like TVs or computers, or personal grooming expenses like haircuts. In short, any need that Medicaid is required to cover cannot be paid for by trust money, lest Medicaid benefits be removed.

Call A Naples Estate Planning Attorney

If you have questions, concerns or just want to set up a complimentary consultation to discuss your personal legal issues in a confidential setting, contact James R. Nici, the Managing Partner of Nici Law Firm, a Naples estate planning attorney with almost 30 years of legal experience.  This may be the first step toward ensuring all is how you want it to be going forward. Contact our offices today via our website, or on the telephone at 239-449-6150, to schedule your complimentary consultation.


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