What is the meaning of SNT?

A Special Needs Trust (SNT) is a legal tool designed to provide financial support for individuals with disabilities while preserving their eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI). It allows individuals with disabilities to receive assets without disqualifying them from receiving essential public assistance.

The primary objective of an SNT is to enhance the quality of life for individuals with disabilities by supplementing their government benefits with additional funds for necessities like housing, transportation, education, and medical treatments not covered by Medicaid.

An SNT can be established by a parent, grandparent, guardian, or the individual themselves if they possess the legal capacity to do so. The trust must be structured to ensure that the beneficiary has no direct control over the funds and that the trustee is responsible for managing and distributing the assets.

There are two types of SNTs: first-party trusts, which are funded with the beneficiary's own assets, and third-party trusts, where the funds come from someone else, such as a parent or guardian. Third-party trusts typically do not affect the beneficiary's eligibility for government benefits.

In contrast, first-party trusts can be more complex and require careful planning to avoid disqualifying the beneficiary from government benefits. For instance, a payback provision may be included in the trust, requiring that any remaining funds be used to repay the government for benefits received upon the beneficiary's death.