Pros and Cons to Setting Up a Special Needs Trust (SNT)

By, Kristen Gartner, Elder & Disability Law Clinic Student, Spring 2023

A special needs trust can be beneficial to help insure those with disabilities are taken cared for, however, their vast and complicated rules can sometimes outweigh the potential benefits of them. Before deciding if a special needs trust is the appropriate financial solution, consider the following pros and cons.

Basics of a Special Needs Trust

A trust is “a legal document that provides directions and rules for assets held on behalf of a beneficiary.”[1] However, unlike a standard trust, a special needs trust (also known as a supplemental needs trust) is designed specifically with disabled people in mind and the government benefits that they receive.[2] The purpose is to make sure funds are available for additional things that a person would need to be taken care of.[3]


There are many benefits to a special needs trust that can be helpful to someone with disabilities. Mainly, a special needs trust will not cause a person to lose their eligibility for disability benefits like social security, supplemental security income, or Medicaid.[4] The trust is used for needs that are not covered by these governmental programs like costs for education, household items, transportation, babysitters, computers, etc.[5]

Additionally, because of the stringent rule and requirements, these funds can only be used for the person with the disability.[6] This is reassuring for the person setting up the trust, especially because people with disabilities are more likely to be taken advantage of or influenced in a way that would be against their best interests.[7] Similarly, the money also cannot be touched by creditors.[8]

Finally, special needs trusts can either be set up as first-party or third-party trusts, meaning that a parent or guardian can set up a trust for their child or dependent or the disabled person can set one up for themselves.[9] These options can provide some flexibility in the decision-making process of how to care for someone with a disability.


Special needs trusts can be very complicated. Because of this, a person should not use funds from a special needs trust without discussing everything thoroughly with a special needs planner, for fear that the funds be used incorrectly or for the wrong reasons and could potentially disqualify the disabled person from the benefits that the trust is supposed to protect for them.[10] Due to the complexity, a special needs trust should not and often cannot be set up for people who lack the resources that is required for proper management of the trust.[11]

Similarly, special needs trusts can be costly to set up and manage.[12] Additionally, there are often minimum amounts that are required.[13]


While a special needs trust can be beneficial to those who have certain concerns about caring for a person with a disability, they can be incredibly complex. They are designed to ensure that the disabled person is not disqualified from government benefits that they likely rely on to take care of their basic needs. Because of this, the decision on creating a special needs trust is not a light one and should be done under the care of an attorney who specializes in special needs trusts.

[1] Special Needs Trusts: A Parent’s Guide, Special Needs Financial Planning, (last visted Feb. 12, 2023).

[2] See id.

[3] See id.

[4] Melissa Stuart, The Pros and Cons of a Special needs Trust: Ensuring Your Child’s Future, Friendship Circle (Sept. 6, 2012),

[5] What Can a Special Needs Trust Pay For?, Special Needs Answers (Feb. 12, 2019),

[6] See Stuart, supra note 4.

[7] Id.

[8] Id.

[9] See Special Needs Financial Planning, supra note 1.

[10] See Stuart, supra note 4.

[11] Id.

[12] Id.

[13] Id.