Supplemental or Special Needs Trust:

A Supplemental or Special Needs Trust (“SNT”) is typically established as an irrevocable trust. It is our intention when creating an SNT to provide for the use of family wealth as a supplement to public benefits. Generally, public benefits for the disabled person take into account assets that the disabled person owns or controls. When an SNT is used to hold assets, so long as the disabled beneficiary does not have demand rights, does not participate in funding the SNT, and is not the Trustee, the assets in the SNT should not be countable resources for purpose of calculating his or her public benefits.


Payback Provisions

In certain circumstances, public benefits provided to someone who has an SNT must be repaid upon the death of the disabled person. This depends on the type of benefits received. While payback may not seem like an ideal result, it does allow for the postponement of costs associated with care until after death, and often results in the net cost being lower, in that it is paid at the public source rate and not private pay rate. Payback does not apply in all cases.


Administration of the SNT

The SNT must have its own Taxpayer Identification Number (TIN).The Trustee may need to file annual income tax returns for the SNT, reporting income and expenses of the SNT, as well as any distributions made during the year.

The Trustee must carefully follow the distribution provisions and keep detailed records of all SNT activity, including records of all uses of funds. If the Beneficiary is receiving any public benefits, these records should be as comprehensive as possible.


Waltz, Palmer & Dawson, LLC

3701 Algonquin Rd. Suite 300
Rolling Meadows, Illinois 60008

Phone: (847) 253-8800
Fax: 847-253-8822

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