A special needs trust or “supplemental needs trust” is a trust created for the benefit of a physically or mentally disabled individual. The purpose of such a trust is to provide an individual the ability to receive litigation settlement funds or inheritance funds without affecting their government benefits.
This type of estate planning, ensures that the recipient of a settlement award or inheritance has his or her benefit eligibility preserved and is not subject to unnecessary Medicaid payback provisions.
Example: Amber is a 39-year-old women involved in an automobile accident that left her paralyzed and with permanent brain damage. The lawsuit settlement provided that Amber was to receive $600,000.00 for damages. The settlement agreement was structured so that instead of being paid the money directly, it was put into a Special Needs Trust for Amber and allowed her to obtain Medicaid assistance.
From the New York Times:
The results of the new analysis are preliminary, but they offer the most drastic estimate of how tightening the criteria for autism could affect the rate of diagnosis. For years, many experts have privately contended that the vagueness of the current criteria for autism and related disorders like Asperger syndrome was contributing to the increase in the rate of diagnoses — which has ballooned to one child in 100, according to some estimates.