Why an ordinary inheritance can hurt
Supplemental Security Income and Medicaid are needs-based. A person receiving them generally cannot hold more than $2,000 in countable assets. An inheritance left outright—even a modest one from a grandparent—can suspend benefits until it is spent down, and the money is often gone within a year with nothing lasting to show for it.
Third-party special needs trust
A third-party special needs trust holds assets you leave for your loved one, managed by a trustee you choose, for “supplemental” needs—therapies not covered, a vehicle, travel, technology, a better apartment, a caregiver. Because the beneficiary never owns the assets, benefits continue, and because the funds were never the beneficiary's, Medicaid has no payback claim when the trust ends. It can be created inside your revocable trust and funded by your estate, life insurance and gifts from other relatives.
First-party trusts and ABLE accounts
When the person with a disability already has assets—a settlement, an inheritance received outright—a first-party (d)(4)(A) trust or a pooled trust can preserve eligibility, with a Medicaid payback at death. An ABLE account (South Carolina participates through Palmetto ABLE) lets a person whose disability began before the qualifying age save for disability expenses without affecting SSI up to the program limits. We usually combine the tools.
Guardianship and the alternatives
When a child with a disability turns eighteen, parents lose legal authority. Options range from powers of attorney and supported decision-making, when the young adult can sign them, to guardianship or conservatorship through the probate court when they cannot. We help families choose the least restrictive option that actually works.
Letter of intent
Alongside the legal documents, we ask parents to write a letter of intent: routines, medications, providers, what calms and what upsets, hopes for the future. Trustees and guardians tell us it is the most useful document in the file.
Plan for a lifetime.
Bring the benefits letters and any existing trust documents. We will build the plan around what your loved one receives.
Questions people ask
Can grandparents leave money to a special needs trust?
Yes. Once the trust exists, any relative can name it in a will, trust or beneficiary designation.
Who should be trustee?
Often a sibling or trusted relative, sometimes with a professional co-trustee for larger trusts. The trustee must understand benefit rules; we provide written guidance.
Related pages
Guardianship & conservatorship
Court-appointed decision-makers for adults who cannot manage and for minors—contested or not.
Learn moreRevocable living trust
Avoid probate, plan for incapacity, keep it private. When a trust is worth it.
Learn moreAsset protection trusts
Irrevocable trusts, Medicaid look-back, and honest limits on what can be protected.
Learn more