Most conversations about Special Needs Trusts start with parents of young children, but the need doesn’t stop when a child turns 18. Adulthood adds a new layer of complexity because the guidelines regarding means-tested benefits such as SSI and certain Medicaid programs at stake often change at 18, and the Trust structure that protects those benefits may need to change with them. This post is for families who are navigating Special Needs Trust (SNT) planning for an adult child.

What is a Special Needs Trust?

Before I define a Special Needs Trust, let’s look at what a Trust is. A Trust is an agreement between the trust maker (you) and your Trustee (usually also you) that explains how your assets are to be handled during and after your lifetime. A Special Needs Trust is a Trust that holds assets for a person with disabilities. The point of this Trust is to hold these assets without disqualifying them from needs-based government benefits.

Why do I need a Special Needs Trust?

If you or a loved one receives means-tested benefits, a direct inheritance or gift above the asset limit can disqualify a person from those government benefits. Medicaid and SSI are the benefits most often affected.

To prevent disqualification of these benefits, a Special Needs Trust can be utilized so that the beneficiary does not receive their inheritance directly and instead has a Trustee who oversees any payments made from the Trust for their care.

Different Types of Special Needs Trusts

There are three common types of Special Needs Trusts: third-party SNTs, first-party (self-settled) SNTs, and pooled trusts. The most important distinction is whether the assets belong to someone other than the beneficiary or belong to the beneficiary.

Each one serves a different purpose. Generally speaking, this article addresses third party Special Needs Trusts, but it’s good to know about the others.

Third-Party Special Needs Trust 

A Third-Party Special Needs Trust is a Special Needs Trust set up by a third party for a beneficiary with special needs. An example would be a parent creating a Special Needs Trust for their child who receives SSI and Medicaid. The purpose of the Trust is to provide for the needs of their child without disqualifying or limiting their access to the government benefits they receive. This SNT can be utilized immediately or be triggered at the death of their parent.

First-Party Special Needs Trust

This is also called a self-settled Special Needs Trust. And it’s exactly what it sounds like. You create a Special Needs Trust for yourself. You would do this to prevent any limitations of government benefits. Typically, we see these types of Trusts created when a disabled person receives an inheritance, cash prize, or settlement outright. Receiving a large windfall would trigger an overpayment or disqualification of needed government benefits, so they create a Special Needs Trust to hold and own the money for them. A first-party Special Needs Trust holds assets belonging to the person with a disability. Federal law permits certain individuals or entities to establish the trust on the beneficiary’s behalf. First-party SNTs have additional requirements, including Medicaid payback provisions, that do not generally apply to a properly structured third-party SNT.

Pooled Special Needs Trust

This is the least common type of Special Needs Trust. This type of Trust is run by a non-profit organization and typically pools the monies of multiple disabled individuals. The non-profit generally manages and invests the funds. Within the larger pooled Special Needs Trust each beneficiary has their own sub-Trust.

What can a Special Needs Trust not pay for?

The Special Needs Trust cannot pay for anything that would substitute for government benefits. The government benefits are there to pay for most medical expenses, food, and shelter. If funds from the Special Needs Trust are used to cover these things, it can trigger what is called an overpayment, a reduction in benefits, or cessation of the benefits altogether. The whole purpose of the Special Needs Trust is to avoid these issues. So, it is important that the Trust only pays for things outside of these expenses.

A Special Needs Trust can generally pay for a wide range of expenses, including some expenses that may otherwise be paid by government benefits. However, certain payments—particularly payments for shelter—can affect the beneficiary’s SSI. The effect depends on the type of trust, the benefit involved, and how the payment is made. For that reason, the Trustee should carefully consider the impact of distributions on the beneficiary’s benefits before making payments for food, shelter, or other needs-based expenses.

What can a Special Needs Trust pay for?

A Special Needs Trust is there to catch any expenses for quality of life that means-tested benefits such as SSI and certain Medicaid programs do not cover. This can include education, recreation, transportation, technology, personal care items, and travel.

The Trustee’s role in a Special Needs Trust?

The Trustee generally should make distributions in a manner that does not unnecessarily jeopardize the beneficiary’s eligibility for needs-based benefits. Direct cash distributions to an SSI recipient can count as income, so the Trustee should carefully evaluate the effect of any direct distribution before making it.

Can the Trustee of a Special Needs Trust be paid?

Yes. In fact, many people choose to name a professional Trust company to serve as the Trustee of their child’s Special Needs Trust. This specific type of appointment can be stressful to those unfamiliar with the process. Regardless of whether you name a professional company or the beneficiary’s sibling to serve as Trustee, there can be provisions made to ensure that person or entity is paid for their time.

What changes at age 18 for a person with disabilities in Georgia?

When a person on government benefits reaches age 18, different rules come into play. The beneficiary is now legally an adult, so a different framework is often applied to determine if they continue to remain eligible for the benefits they have received.

For instance, government benefit eligibility may shift. Oftentimes, SSI eligibility is reassessed at age 18 using adult disability criteria. Usually the child retains their eligibility, but sometimes they do not. More often children who received only a partial amount of their potential SSI check will begin to receive the full amount, since their parent’s income is no longer considered. Additionally, Medicaid coverage may change. 

Legal guardianship changes at 18

When a disabled child turns 18, their parents are no longer automatic legal guardians. This provision is in place to protect children and adults. But it can be particularly problematic when it is not properly addressed. 

If your disabled child has reached the age of 18 and has capacity, they can name a power of attorney to act on their behalf as well as name an agent in an Advance Directive for Medical Care.  If an adult lacks capacity to make or communicate decisions and has not executed appropriate advance planning documents while they had capacity, a family member may need to seek guardianship and/or conservatorship through the Georgia courts, depending on the decisions that need to be made.

Does a Special Needs Trust set up for a minor still work when the child becomes an adult?

In most cases a properly drafted Special Needs Trust created for a child continues to function when the child becomes an adult. When I draft a Special Needs Trust for a client, I ensure that there are provisions put into place that continue to protect their child after they reach adulthood. This means that Special Needs provisions carry throughout their lifetime. Depending on the trust structure, it may also be appropriate to include provisions addressing what happens if the beneficiary is no longer disabled or no longer needs means-tested benefits. This may be utilized for children who are diagnosed with learning disabilities but are able to transition into the workforce without needing government benefits. 

If you have a Trust with special needs provisions for a child within it, and you have any concerns that it might not function properly for the child, it’s good to review it to ensure it does and will continue to do exactly what you intend. Additionally, it should be reviewed to ensure that the Trustee is still appropriate for an adult beneficiary.

I’m reviewing my Special Needs Trust, what should I check?

• Trustee – are they still willing and able to serve 
• distribution standards – are they correct and do they clearly define what the Trust can pay for
• age specific provisions – are they still correct or do they need to be adjusted

How do I set up a Special Needs Trust for an adult child?

Perhaps you have an adult child who developed a disability in adulthood, and you have been managing their needs in an informal manner, but you want to formalize a plan. It may seem daunting and overwhelming. But it doesn’t have to be. When you work with my team, we help you every step of the way to ensure that your plan properly cares for your adult child even after you’re gone. 

Setting up a Special Needs Trust in 3 easy steps:

1. Gather up your basic information (general idea of assets and their value, names and contact info of each beneficiary, a general list of potential Trustees and guardians);
2. Schedule a consultation with me to go over everything. I’ll help you determine exactly what will serve your family best and answer your questions;
3. Let me draft your documents and then come in to sign them.

Coordinating the Special Needs Trust with the rest of the estate plan

You can create a Special Needs Trust in different ways. Some people opt to create it under the terms of their Will. This is called a testamentary Trust since it is a part of your Last Will and Testament. And while this can be effective, it is often not the best way to create provisions for your disabled child.

Instead, I often recommend a Living Trust that specifically creates Special Needs Trusts for any beneficiary that needs one. In some cases, I would recommend drafting an entirely separate Trust for your disabled child.

Regardless of how you create the Special Needs Trust, it should be named as the destination for assets intended for the child with a disability. 

 If you intend for an inheritance or other asset to benefit a person receiving means-tested benefits, beneficiary designations should be coordinated with the estate plan so that the asset passes in a manner that does not inadvertently disqualify the beneficiary from those benefits. For retirement accounts and other accounts with beneficiary designations, the appropriate designation should be reviewed with the estate planning attorney.

What about my other children?

Many parents just assume their other children will take care of their disabled sibling but never have a conversation or address this formally. It is absolutely crucial to have open, non-judgmental, listening conversations with your children in advance of your death. 

I met with a family once who said their adult daughter would take care of their disabled child upon their deaths. Once they began discussing the realistic responsibilities with their daughter, we ended up choosing a trust company to be trustee of the trust. Their adult child was preparing to move abroad and coordinating care would have been extremely difficult. Together we came up with a plan that would serve both children well, and a stressful family situation was avoided.

I often recommend that you provide the future Trustee of the Special Needs Trust with a letter of intent. This letter explains to the Trustee that they need to understand the beneficiary’s preferences, needs, daily life, and what matters to them. It also explains what they can and cannot do as a Trustee.

ABLE accounts

ABLE accounts are tax-advantaged accounts that allow eligible individuals with disabilities to save and pay for qualified disability expenses while generally preserving eligibility for certain means-tested benefits. Beginning January 1, 2026, the disability-onset age for ABLE eligibility increased from before age 26 to before age 46. They have very specific rules, but they can be used to complement a Special Needs Trust. To learn more about them, click here.

FAQs

How do I create a Special Needs Trust over 18 in Georgia?

If you’re looking to create a trust for someone over 18 in Georgia, it’s important to understand why you are doing it. SNTs are designed to protect disabled people for losing access to their  means-tested benefits such as SSI and certain Medicaid programs. If your loved one is a recipient of means-tested government benefits and you want to provide for them, the best way to do this is to establish a Special Needs Trust. We would love to walk you through the process and create a plan that cares for your loved one long after you are gone!

How do I set up a Special Needs Trust for myself in Georgia?

If you’re looking to create an SNT for yourself, this is called a first-person SNT. This is where you put assets you have come into ownership of into an SNT, and you name a trustee to oversee these assets on your behalf. 

My adult child has a disability. Should I set up a Trust in Georgia?

If you want to leave your adult child an inheritance or if you want to provide for them without limiting their access to government benefits, a Trust is a good idea. You can create a Special Needs Trust that holds assets for the benefit of your child. The best part about this is that the trustee you name handles the expenses directly out of the trust fund, meaning no funds are ever owned by your child directly. This allows them to retain eligibility of their government benefits, and it allows you to continue to provide for their needs that are not covered by said benefits.

What is special needs planning in Georgia?

Special Needs Planning typically involves a comprehensive estate plan, as well as guardianship and power of attorney documents that are utilized during your lifetime. Every family is unique and has unique needs, but for most of my clients I advise a plan that includes a Living Trust with special needs provisions within, Last Will and Testament, Durable Power of Attorney for business and financial decisions, Advance Directive for Medical decisions, Guardianship documentation for any minor children or children with special needs, and sometimes separate Special Needs Trusts for disabled children.

Protect Your Adult Child’s Future—Without Endangering Their Benefits.

As your child transitions into adulthood, their legal and financial needs change. Whether you need to update an existing Special Needs Trust, establish guardianship, or build a comprehensive estate plan from scratch, you don’t have to navigate Georgia’s estate laws alone.

Ready to take the next step? Book a Strategy Session Today. We’ll walk you through our simple 3-step process to ensure your loved one is protected for life.