Special Needs Trusts in Florida: How to Protect a Disabled Loved One Without Destroying Their Benefits

Updated August 3, 2026. This article provides general information and is not legal advice.

A gift or inheritance for a person with a disability requires careful planning when that person receives needs-based benefits such as Supplemental Security Income or Medicaid. Assets given outright may affect eligibility, depending on the program and the recipient's circumstances. A properly structured special needs trust may allow funds to supplement—not replace—covered benefits.

What is a special needs trust?

A special needs trust holds assets for a beneficiary with a disability and authorizes a trustee to make distributions under the trust's terms. The trust should be coordinated with benefit rules, tax considerations, the beneficiary's care plan, and the source of the funds.

Third-party special needs trusts

A third-party trust is funded with assets belonging to someone other than the beneficiary, such as a parent or grandparent. It may be created during the donor's life or through a will or revocable trust. Proper drafting can allow the trustee to pay for supplemental goods and services without giving the beneficiary direct control over the trust assets.

First-party special needs trusts

A first-party trust is funded with assets belonging to the beneficiary, such as a settlement or inheritance already received. Federal law imposes specific requirements, and Medicaid reimbursement provisions may apply at the beneficiary's death. The Social Security Administration discusses these trust rules in its Program Operations Manual System.

What can a trustee pay for?

Permitted distributions depend on the trust and the benefit program. Payments for housing, food, cash, or items that duplicate covered benefits may affect eligibility or benefit amounts. Trustees should obtain program-specific advice before making distributions rather than relying on a generic list.

Choosing a trustee

• Consider financial judgment and recordkeeping ability.

• Confirm willingness to learn benefit rules and follow the trust.

• Evaluate whether a professional or co-trustee is appropriate.

• Name successors in case the first choice cannot serve.

Coordinate the entire estate plan

Parents and relatives should review wills, trusts, beneficiary designations, life insurance, and retirement accounts. A well-drafted trust can be undermined if another asset is left directly to the beneficiary.

Speak with a Florida estate-planning attorney

Bechert & Associates assists families with disability-related estate planning and trust coordination. Learn about our estate-planning services or contact the firm.

What Is a Special Needs Trust?

A Special Needs Trust (SNT) is a legally recognized trust that holds assets for the benefit of a person with disabilities without counting those assets toward Medicaid or SSI resource limits. The trust can pay for expenses that government benefits don't cover — including education, transportation, recreation, personal care items, technology, and quality-of-life enhancements — while preserving full benefit eligibility.

Third-Party vs. First-Party Special Needs Trusts

A Third-Party SNT is funded by parents, grandparents, or other family members — not the disabled individual. This is the most common type used in estate planning. A First-Party SNT (also called a Self-Settled Trust or d4A Trust) is funded with the disabled person's own assets, often from a personal injury settlement or inheritance received before the trust was established. Each type has distinct rules and Medicaid payback requirements.

Why Professional Drafting Is Essential

An improperly drafted Special Needs Trust can inadvertently disqualify your loved one from benefits or fail to achieve your intended purpose. Florida SNTs must comply with both state law and federal benefit program regulations. Choosing the right trustee, including proper discretionary language, and coordinating the trust with your overall estate plan are all critical decisions that require experienced legal guidance.

Plan for Your Loved One's Future with Bechert & Associates

At Bechert & Associates, P.A., we help Broward County families create Special Needs Trusts that protect their most vulnerable loved ones for life. Serving Pompano Beach, Fort Lauderdale, Boca Raton, and all of South Florida — call us today to discuss your family's unique situation.