# Special Needs Trust Benefits

> Special needs trusts protect disabled loved ones' finances without losing government benefits.
- Title: Special Needs Trust Benefits · Kiplinger | Shortify
- Summary: Special needs trusts protect disabled loved ones' finances without losing government benefits. Special needs trusts hold assets for disabled beneficiaries…
- Keywords: special needs trust, medicaid, social security, financial planning, disabled beneficiary, trustee, Special, Needs, Trust, Benefits, Kiplinger
- Source: Kiplinger — https://kiplinger.com/retirement/estate-planning/the-benefits-of-a-special-needs-trust
- Published: 2026-09-30T19:05:00+00:00
- Read time: 1 min
- Topics: special needs trust, medicaid, social security, financial planning, disabled beneficiary, trustee
## What is a special needs trust
A special needs trust holds assets for a beneficiary with disabilities without affecting their eligibility for government benefits like Medicaid and Social Security.
## Types of special needs trusts
Third-party trusts are funded by someone other than the beneficiary, while first-party trusts use the disabled person's assets.
## Third-party trust benefits
Third-party trusts allow more agency in distributing assets after the beneficiary dies, such as to siblings or charities.
## First-party trust limitations
First-party trusts require Medicaid to reimburse services before any remaining funds can be used for the beneficiary.
## Trust revocability options
Third-party trusts can be revocable or irrevocable, with families often choosing irrevocable trusts for stronger long-term protection.
## Funding trust assets
Assets like cash, real estate, and investments can be placed in a trust, with life insurance policies often naming the trust as beneficiary.
## Trustee responsibilities
Trustees manage assets for the beneficiary's benefit, with corporate trustees recommended for impartiality and tax management.
## Key takeaway

Special needs trusts hold assets for disabled beneficiaries while preserving eligibility for Medicaid and Social Security.