What is a special needs trust in New York?

A special needs trust, also called a supplemental needs trust, is a legal arrangement that allows funds to be set aside for a disabled person without affecting eligibility for needs-based programs like Medicaid and SSI. The trust is managed by a trustee, who uses the assets to pay for approved expenses. This planning helps families protect benefits while providing extra support for their loved one’s care.

How do payments from a special needs trust affect SSI?

Some payments from a trust can reduce SSI if not handled carefully. For example, direct cash given to the beneficiary is always counted as income and can lower or suspend SSI for that month. Shelter payments, such as rent or utilities, are treated as in-kind support and may also reduce SSI up to a capped amount.

What types of expenses can a special needs trust cover?

A special needs trust can pay for a wide variety of goods and services that improve quality of life. These can include therapies, transportation, education, equipment, and cultural or recreational activities. The key is that the payments supplement benefits without replacing the support provided by Medicaid or SSI.

What is the difference between a third-party and a self-settled special needs trust?

A third-party trust is funded with assets from someone other than the disabled individual, such as a parent or relative, and it does not require a Medicaid payback clause. A self-settled trust is funded with the disabled individual’s own assets, often from settlements or inheritances, and must include a Medicaid payback provision. Both types allow the beneficiary to maintain eligibility for public assistance when properly structured.

What recent change has been made regarding food payments and SSI?

Starting on September 30, 2024, if a trust pays for food, Social Security no longer counts it as in-kind support. This means food payments from the trust will not reduce SSI benefits. It is a significant change that allows families to use trust funds for nutrition without penalty.

What legal requirements must a New York special needs trust meet?

A valid New York supplemental needs trust must include statutory language under EPTL 7-1.12 stating it supplements, not replaces, benefits. The trust must also grant the trustee full discretion over distributions. In first-party trusts, federal Medicaid rules require the arrangement to be irrevocable, created before age 65, and include a Medicaid payback clause.

How can trust funds be used for medical needs?

Trust assets can be applied toward medical expenses not covered by Medicaid. These may include wheelchairs, mechanical beds, or accessible vans. In addition, the trust may pay for activities that enrich the beneficiary’s life, such as cultural or recreational programs, as long as these payments do not interfere with eligibility rules.

Is there a difference between “supplemental needs trust” and “special needs trust”?

Originally, “supplemental needs trusts” referred to arrangements meant to add to benefits provided by Medicaid and SSI. After 1993 legislation, some attorneys began distinguishing between self-settled trusts and third-party trusts by using different terms. Today, however, both terms are used interchangeably, and they serve the same purpose of supporting a person with disabilities while protecting benefits.

How can The Matus Law Group help families with special needs planning?

At The Matus Law Group, we guide families through every step of creating a special needs trust. We explain the differences between trust types, draft documents that comply with New York law, and help trustees manage distributions properly. Our role is to ensure that your loved one’s benefits remain protected while their quality of life is enhanced.

How can someone contact The Matus Law Group for assistance?

You can reach The Matus Law Group by calling (929) 412-1808 to schedule a consultation. Our attorneys, including Christine Matus and Kristine Carranceja-Gurski, are ready to discuss your family’s unique needs and provide tailored legal guidance. We encourage families to call and set up an appointment to protect their loved one’s future.

New York Special Needs Trusts Lawyer

New York Special Needs Trusts Lawyer - Special Needs Trust Attorneys - Special Needs Trust Lawyer

Special needs trusts, also called supplemental needs trusts, can help you plan for a loved one’s future in New York. In an SNT, you appoint a trustee who manages money for your loved one. When the trust is drafted and run correctly, the principal is not counted as a resource for needs-based programs like Medicaid and SSI. That means your loved one can keep critical benefits while you set aside funds for their care.

Some payments from the trust can still be treated as income. Shelter payments can reduce SSI. Direct cash given to your loved one counts as income too. With careful planning, the trust can cover many extras that improve the quality of life without hurting benefits.

If you want clear guidance tailored to your family’s circumstances, talk with The Matus Law Group. For more than 20 years, we have helped parents set up trust funds and supplemental needs trust funds. Our goal is to protect your loved one’s benefits while supporting their everyday life.

Speak with an NYC estate planning attorney or connect with a New York City special needs trust lawyer at The Matus Law Group by calling (929) 412-1808.

We Are Here To Help

Attorney Christine Matus (a special needs parent herself), attorney Kristine M. Carranceja-Gurski, and the entire team at Matus Law Group are here to help protect your family’s future today

Call now to make an appointment and discuss special needs planning (929) 412-1808.

How Can You Use Supplemental Needs Trusts in NY?

Your special needs trust can cover a lot more than you might think. It can pay for many goods and services that improve your daily life. It is not limited to school-related purchases. What matters is how each payment affects your benefits.

Housing costs: Rent, mortgage payments, property taxes, and utilities are allowed. If the trust pays these, Social Security treats the help as in-kind support. That can reduce your SSI, sometimes up to the presumed maximum value cap.

Food: There is good news here. Starting September 30, 2024, if the trust pays for your food, Social Security does not count it as in-kind support for SSI. Those payments will not reduce your SSI for that reason.

Direct Cash: If the trust gives you money directly, Social Security counts it as income. That can lower or even suspend your SSI for the month. To avoid this, trustees usually pay stores, landlords, and service providers directly.

Protect your loved one’s future. Speak with a New York City estate planning attorney who can tailor spending guidelines so the trust enhances quality of life while protecting eligibility. Call today (929) 412-1808.

Does the Law Allow Using Special Needs Trusts for Medical Benefits or Services?

The law stipulates that trust funds can be used to pay for special medical expenses not covered by Medicaid in your county. This includes wheelchairs, special mechanical beds and accessible vans. In some cases, you can even use funds for planning and financing recreational or cultural activities that will enrich your kid’s life.

It can be difficult to determine what is a supplemental or a necessary need. To do so, you may need the help of an attorney whose practice is focused on special needs planning.

Get in touch:

The Matus Law Group is always here to help answer your questions – if you are looking for special needs planning, allow us to help (929) 412-1808.

What Kind of Trust Can a Special Needs Planning Attorney Set Up?

Third Party Special Needs Trust

This is a type of trust that is funded by another person for the benefits of disabled persons. It is funded from that person’s own estate. It is usually done by an individual who is a relative, spouse, parent, or guardian of the disabled person: someone the person knows and trusts.

The trustee has discretion over distributions. The trust assets themselves are typically not countable resources for SSI/Medicaid, but distributions can be treated as income. For example, shelter payments can reduce SSI; cash to the beneficiary is counted as income. The Third-Party SNT is not set to protect property or estate the disabled person received via inheritance, probate, court settlement, or other sources.

Such trust must not be used to replace government benefits for which the disabled individual may be eligible. Special needs planning lawyer from Matus Law Firm can help you understand NY requirements and guide you through the planning process.

Self-Settled Special Needs Trust

These funds can come from: personal injury award or retirement plan; divorce; settlement; life insurance policy; inheritance or probate. A disabled individual with a substantial amount of property or estate can transfer that property into Self-Settled SNT. The trust must be properly settled and all funds used according to the strict government rules. In this case the funds are not considered income, which allows the beneficiary to become eligible for Medicaid or other government assistance and services.

Two common first-party options are: (1) a ‘d(4)(A)’ special needs trust (often called a ‘payback’ trust) for a disabled individual under age 65, and (2) a pooled trust under 42 U.S.C. §1396p(d)(4)(C) managed by a nonprofit. Both have Medicaid payback requirements; and transfers by people age 65+ into pooled trusts can trigger Medicaid transfer-of-assets penalties for nursing-facility coverage in New York.

Establishing a special needs trust is complicated in many ways. There are important considerations when planning SNT in regards to taxes, public benefits, and the effect the arrangements have on an individual’s financial and estate plans. Special needs planning lawyers at Matus Law Group have decades of experience setting up special needs trusts. Call now to make an appointment and discuss the benefits of special needs planning (929) 412-1808.

Legal Requirements for New York SNTs

New York law sets clear rules for a valid Supplemental Needs Trust. Your SNT must include the statutory language in EPTL 7-1.12 stating the trust is meant to supplement, not supplant, needs-based benefits, and that distributions are wholly discretionary. Draft the trust so that the corpus is not a countable resource and distributions are wholly discretionary; note that distributions can still be counted as income for SSI depending on what they pay for.

For first-party SNTs funded by your own assets, federal Medicaid rules require that the trust be irrevocable, created for a disabled person under age 65, and contain a Medicaid payback clause reimbursing the state when the beneficiary dies. Third-party SNTs funded by family assets do not include payback.

Pooled trusts, run by nonprofit managers, are allowed if they meet the pooled trust requirements in 42 U.S.C. 1396p(d)(4)(C) and SSA guidance. New York Medicaid will not count assets held in a compliant SNT or pooled trust for eligibility, although distributions paid to the beneficiary are treated as income.

Trustee duties matter. The trustee must act as a fiduciary and use trust funds to enhance the quality of life without replacing benefits. Typical payments cover therapies, transportation, education, equipment, or aides. Shelter payments can reduce SSI under the PMV cap, cash to the beneficiary counts as income, and food no longer reduces SSI as ISM effective September 30, 2024. NYC’s HRA issues trustee guidance and expects annual accountings for trusts affecting city-administered benefits.

A New York City special needs trust lawyer can draft compliant terms, work with SSA and Medicaid reviewers, guide your trustee on allowable spending, and keep your plan aligned so your benefits stay intact.

New York Special Needs Trust Lawyer - The Matus Law Group

Kristine Carranceja-Gursk

Kristine Carranceja-Gurski, Attorney at The Matus Law Group, helps New York families navigate trusts and long-term planning with a steady, practical touch. Admitted to the New York Bar in 2008 and the New Jersey Bar in 2007, she pairs legal training from Loyola University New Orleans College of Law (J.D., 2007) with a foundation in finance from her years at brokerage firms, experience that proves invaluable when structuring special needs trusts and coordinating benefits.

A St. John’s University graduate (B.A., Government & Politics, minor in Philosophy, 1996), Kristine is active in the legal community through the New Jersey State Bar Association, the Ocean County Bar Association, and the Monmouth Bar Association. She helped form and served as the first Chair of the Ocean County Bar Association’s Pro Bono Committee. Deeply committed to service, she has lectured on expungement law, presented at continuing legal education programs on the value of pro bono work, and volunteered with initiatives from VITA to nonprofit leadership. Outside the office, she enjoys time with family and friends, travel, foreign languages, and weekend bike rides along the Jersey Shore.

What Can a New York Attorney Do to Protect My Loved One’s Future?

Once you have decided on the Special Needs Trust you are planning to set up, it is important to name the beneficiary. Next, a trustworthy and reliable trustee must be appointed to manage the trust’s finances and make sure the estate is well-maintained.

After this, you designate a guardian (where appropriate) to care for your child or loved one and make crucial decisions. Once you have determined who your beneficiary is, you will need to fund your trust with assets according to the rules of the trust you are planning to set up.

It is possible to create a Special Needs Trust by yourself with help from special guidebooks, online articles, and FAQs regarding this topic. However, planning and setting up a trust can be challenging, and even minor mistakes can be costly. A qualified estate planning attorney can help you understand New York requirements and guide you through the planning process.

Call to speak with our special needs trust lawyers today (929) 412-1808.

Type of SNT	Key Requirements	Medicaid Payback Required
First-party SNT	Funded with beneficiary's assets; irrevocable; created for someone under 65; includes payback clause	Yes
Third-party SNT	Funded by family or others; often part of estate plan; no age limit; no payback clause	No
Pooled Trust	Managed by a nonprofit; assets pooled for investment; individual sub-accounts maintained	Yes (if funded by beneficiary)

What Do Attorneys Advise on Planning And Putting Money in Special Needs Trusts?

Remember that SNT assets belong to the trust, not the beneficiary. The trustee uses them for the beneficiary’s needs.

New York follows federal and state rules on SNT use and benefit coordination. Funds can be used for many needs, including housing, transportation, education, therapies, equipment, and services, but the SSI impact depends on what’s paid.

Common SNT funding sources include:

Asset transfers (e.g., personal property, bank accounts)

Settlements/judgments

Life-insurance proceeds

Jury awards/inheritances

There is no legal minimum to fund an SNT, the amount depends on the person’s projected lifetime needs and administrative costs. The Matus Law Group is always here to answer your questions. If you are planning to set up a supplemental needs trust, our attorneys can help.

We Are Here To Help:

To decide if a first-party or a third-party is a better fit for your loved one, call to speak with Christine Matus, special needs trust attorney today (929) 412-1808.

Is There a Difference Between "Supplemental" and "Special" Needs Trust?

The first arrangements for people with disabilities, which were created more than 20 years ago, were called “supplemental needs trusts”. They were meant to supplement assistance provided by Medicaid and Medicare, Social Security Income, Social Security Supplemental Security Income, or other special public benefit programs, whose support levels are often very low.

Some attorneys argued that the 1993 legislation (“OBRA”) which authorized the creation of self-settled trusts under 42 USC 1396p (d)(4)(A) allowed for a distinction between these arrangements and third party trusts created by parents. They called the former special needs trusts, while the latter were still called supplemental needs trusts. However, this confused the general public.

Both types of arrangements are now simply called “special needs trusts.” Their purpose is to provide financial support for the beneficiary’s special or unique needs. The name of the trust is more focused on the beneficiary while “supplemental” needs trust addresses the shortcomings in the public benefits programs.

When Should I Hire a New York Special Needs Trusts Lawyer?

When planning to set up a trust, make sure you hire a special needs planning attorney who has experience in helping families with children with special needs. Kristine Carranceja-Gurski, a top-rated New York attorney, is one such choice. It is crucial that the attorney plays a role in setting up the trust and advising on the responsibilities and limitations for the trustee. It is important to remember the importance of a Special Needs Trust. It is especially important that funds are available for disabled children.

Planning for your child’s education and well-being takes careful planning. With experienced guidance, you can help ensure their life is secure and that they receive all available benefits they are entitled to. Schedule a consultation with our skilled attorney.

Contact The Matus Law Group today.

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