23 Mar Disability Awareness Month: How a Trust Can Help You Protect Your Loved Ones

Back in 1987, President Ronald Reagan established the month of March as Developmental Disabilities Awareness Month. This year’s theme is “We’re Here: Then, Now, Always.” The goal of this campaign is to bring more awareness to the fact that people with disabilities are all around us, and they are active members of our communities. 

Unfortunately, many families are unaware of the legal steps they can take to protect their loved ones with disabilities. In fact, setting up a special needs trust is one of the best ways to support them, both now and in the future. Here’s why.

What Is a Special Needs Trust?

A special needs trust (also called a supplemental needs trust) is a legal entity that holds assets for a person with a disability. Because the trust owns the assets, the beneficiary can keep their eligibility for government benefits. 

This matters a great deal, because programs like Supplemental Security Income (SSI) and Medicare have strict income limits. 

According to the Social Security Administration, the resource limit for SSI recipients is typically only $2,000 in countable assets. A direct gift or inheritance, even a modest one, can push your loved one over that threshold and cost them their benefits.

A supplemental needs trust can be used to:

• Preserve government benefits. Assets held inside the trust are not counted as personal property.
• Fund the extras. Trust funds can pay for things Medicaid and SSI do not cover, including therapy, recreation, education, transportation, and personal care items.
• Provide for the long term. The trust continues to operate after your passing, providing ongoing support for your loved one without court interference.
• Protect against well-meaning family members. Without a trust in place, a relative who leaves money directly to your child could accidentally cause a benefits disruption.

Who Should Consider Special Needs Planning?

If any of the following describe your situation, a special needs trust is worth exploring:

1. You have a child with a developmental disability who currently receives or may someday receive SSI or Medicare.
2. You are a grandparent, sibling, or other family member who wants to support a loved one with a disability without disrupting their benefits.
3. You already have a revocable living trust, but have never reviewed it with a special needs planning attorney.

How to Add a Supplemental Needs Trust to Your Living Trust

You do not necessarily need to set up a separate trust for a loved one with special needs. In fact, you can simply include a supplemental needs trust provision inside your current living trust. 

Here’s how that typically works:

• Your trust is drafted with a conditional share for any beneficiary who is receiving government benefits at the time of your death.
• If that beneficiary qualifies, the trust assets designated for them are automatically held in the supplemental needs sub-trust.
• The trust administrator will manage and distribute those funds according to strict legal guidelines.
• The trust language can be adapted at any point in your lifetime. If the beneficiary’s disability status or circumstances change, you can update the trust accordingly.

Estate Planning for Families with Disabilities

This March, we want to bring more awareness to the benefits a special needs trust can provide. The families who feel most secure are those who have a plan in place long before they need it.

Your loved one’s future is worth protecting, and there is no better time than now to plan ahead. Whether you are starting from scratch or updating an existing trust, our experts are ready to help. 

Contact Phelps LaClair today to schedule a free consultation in Mesa, Chandler, Tucson, or one of our other Phoenix area offices.

Photo by Pavol Štugel on Unsplash with permission under the Creative Commons license for commercial use 3/15/26.