Does your child need a special needs trust to get Medicaid?

Children with developmental disabilities – cerebral palsy, Down Syndrome, autism, and any other condition that began in childhood – who are not able to work and support themselves are probably going to be able to get social security benefits and Medicaid (called MassHealth in Massachusetts) when they turn 18 years of age. In some cases, they can receive these benefits before 18, but in almost every case they can do so after 18. Social security provides a limited cash payment to persons with a disability who have very low or no income and assets. Even if a child with a disability continues to live at home with parents after they turn 18, if they have little or no income and little or no other resources like savings, they will probably be eligible for supplemental security income (SSI) and Medicaid.

SSI cash benefits are pretty low (currently $770 a month, with some states adding a little bit more), so it’s important to have a way to supplement the limited spending power of that SSI money. While parents are alive, they can buy “extras,” like computers, videos, vacations, even additional therapy or vocational training not covered by insurance. But when the parents die, an inheritance to a child receives SSI and Medicaid will almost always cause them to lose those benefits. People with developmental disabilities who are receiving, or will probably receive in the future, SSI and Medicaid benefits, should never be left an inheritance or be named as a life insurance or pension beneficiary because it will jeopardize their benefits.

That’s where the special needs trust comes in. If a parent or grandparent puts money into this very special type of trust, that money can be used to supplement the government benefits while keeping those benefits in place. A New Jersey special needs trust, a Massachusetts special needs trust, a New Hampshire special needs trust, even a Texas special needs trust, all work the same way to let parents, grandparents, and anyone else who wants to leave money to improve the quality of life of a person with a disability give them money without causing any problem to their government benefits.

So back to the original question: Do you need a special needs trust in order for your adult child to get Medicaid? There are two parts to the answer. First, you may need a special needs trust to get Medicaid at age 18 if the child already has significant assets in their own name. Those assets can be moved to a special needs trust so that the adult child meets the very low asset threshold for eligibility.

The second part of the answer is that even if the adult child initially qualifies for Medicaid without a trust, they will probably need a special needs trust in order to keep those benefits when their parents die. The trust can receive an inheritance, life insurance proceeds, or even pensions, and that money can be used to enhance the quality of life of the adult child without causing them to lose their Medicaid or SSI benefits.

Parker Counsel Legal Services provides planning and guardianship services to families who have children with special needs. We have offices and licensed attorneys to serve families in New Jersey, Massachusetts, New Hampshire, and Texas. Call 833-RED-BOOT (833-733-2668) to request a consultation.

The Safety Dance


“Ah we can dance if we want to, we can leave your friends behind
Cause your friends don’t dance and if they don’t dance
Well they’re are no friends of mine” Safety Dance by Men Without Hats

Parents worry about how the world will treat their children who don’t fit the norm, especially as those children grow older. All children are a bit quirky, and even a few minutes observing the staff on a pediatric hospital ward will demonstrate how easily adult staff members expect and adapt to the “quirks” of their young patients.

Adults, on the other hand, are expected to conform to the situation, and a lot of adults with developmental disabilities are simply not able to do that, making parents worry about the treatment their adult children will receive in the community.

The good news is that community based living initiatives and inclusion in the schools provide a lot more opportunities for people of all kinds to be around individuals with developmental disabilities, and so to be better prepared to respond empathetically when needed.

A story reported recently in the Chicago Tribune illustrates how the world may eventually be. It tells the story of Walker, a man with autism who was having a very difficult day, who met the public safety officers at Loyola University Medical Center after he attacked his mother in the emergency room. And the rest of the story is as good as it can possibly get. This is how the world can be. Read the story here: A man with autism, behaving violently, winds up in the ER. The officers on duty respond – with singing and dancing.